Background: Weight loss and under-nutrition are relatively common in older people, and are associated with poor outcomes including increased rates of hospital admissions and death. In a pilot study of 49 undernourished older, community dwelling people we found that daily treatment for one year with a combination of testosterone tablets and a nutritional supplement produced a significant reduction in hospitalizations. We propose a larger, multicentre study to explore and hopefully confirm this exciting, potentially important finding (NHMRC project grant number 627178). Methods/Design. One year randomized control trial where subjects are allocated to either oral testosterone undecanoate and high calorie oral nutritional supplement or placebo medication and low calorie oral nutritional supplementation. 200 older community-dwelling, undernourished people [Mini Nutritional Assessment score <24 and either: a) low body weight (body mass index, in kg/m2: <22) or b) recent weight loss (>7.5% over 3 months)]. Hospital admissions, quality-adjusted life years, functional status, nutritional health, muscle strength, body composition and other variables will be assessed. Discussion. The pilot study showed that combined treatment with an oral testosterone and a supplement drink was well tolerated and safe, and reduced the number of people hospitalised and duration of hospital admissions in undernourished, community dwelling older people. This is an exciting finding, as it identifies a treatment which may be of substantial benefit to many older people in our community. We now propose to conduct a multi-centre study to test these findings in a substantially larger subject group, and to determine the cost effectiveness of this treatment.