Decreases in sex hormone levels with menopause may bring about a number of consequences in women's general health and sexual well-being, especially when levels decline suddenly and prematurely, as in surgical menopause. In addition to the well-established role of estrogens in preserving the biological basis of sexual response, there is emerging evidence that androgens are significant independent determinants affecting sexual desire, activity and satisfaction, as well as mood, energy and other components of women's health. Hypoactive sexual desire disorder (HSDD), a persistent absence of sexual fantasies or thoughts and/or desire for and receptivity to sexual activity that causes personal distress, is experienced by some postmenopausal women. Even though conventional hormone therapy with estrogens or estrogens and progestogens may be effective for vaginal atrophy, increasing vaginal lubrication and reducing dyspareunia, it has not been shown to consistently increase sexual desire or activity and many women with sexual dysfunction remain unresponsive. Several recent, large, phase III studies have shown that the addition of transdermal testosterone to conventional hormone therapy can be helpful in surgically menopausal women presenting with HSDD. After 24 weeks of treatment in these studies, testosterone-treated women experienced significantly greater increases in satisfying sexual activity and sexual desire, and greater decreases in distress, than placebo-treated women. Accurate clinical assessment and individualized management of sexual symptoms are fundamentally important for all menopausal women with HSDD or other sexual problems.