Objective: This study aims to investigate the effects of testosterone on cognitive performance during functional magnetic resonance imaging (fMRI) in healthy estrogen-treated postmenopausal women. Methods: This was an open-label study in which postmenopausal women on nonoral estrogen therapy were treated with transdermal testosterone for 26 weeks. Women performed tests of verbal fluency (number of words) and mental rotation (reaction time and accuracy) during pretreatment and posttreatment fMRI. Blood oxygen level-dependent (BOLD) signal intensity was measured during fMRI tasks. Results: Nine women with a mean (SD) age of 55.4 (3.8) years completed the study. Twenty-six weeks of testosterone therapy was associated with significant decreases in BOLD intensity during the mental rotation task in the right superior parietal, left inferior parietal, and left precuneus regions, and during the verbal fluency task in the left inferior frontal gyrus, left lingual gyrus, and medial frontal gyrus (all P <0.05), with no change in task performance, accuracy, or speed. Conclusions: Testosterone therapy is associated with reduced BOLD signal activation in key anatomical areas during fMRI verbal fluency and visuospatial tasks in healthy estrogen-treated postmenopausal women. Our interpretation is that testosterone therapy facilitates preservation of cognitive function with less neuronal recruitment.