Background: Gonadal steroid levels decline with age in men. Whether low testosterone levels affect the development of common age-related disorders, including physical functioning and falling, is unclear. Methods: This longitudinal, observational follow-up study sought to determine whether low testosterone levels are associated with physical performance and fall risk in older men. A total of 2587 community-based men aged 65 to 99 years were selected using a stratified random sampling scheme from a study cohort of 5995 volunteers. Bioavailable testosterone and estradiol levels and physical performance measures were determined from baseline. Incident falls were ascertained every 4 months during 4 years of follow-up. Generalized estimating equations were used to estimate risk ratios for the relation of sex steroids to falls. Results: Fifty-six percent of the men reported at least 1 fall; many fell frequently. Lower bioavailable testosterone levels were associated with increased fall risk. Men with testosterone levels in the lowest quartile had a 40% higher fall risk than those in the highest quartile. The effect of low testosterone levels was most apparent in younger men (65-69 years) (relative risk, 1.8; 95% confidence interval, 1.2-2.7); testosterone level was not associated with falls in the oldest men (≥80 years). Lower testosterone concentrations were associated with reduced physical performance. However, the association between low testosterone levels and fall risk persisted despite adjustment for performance. Conclusions: Falls were common among older men. Fall risk was higher in men with lower bioavailable testosterone levels. The effect of testosterone level was independent of poorer physical performance, suggesting that the effect of testosterone on fall risk may be mediated by other androgen actions.