Circulating concentrations of sex hormone-binding globulin (SHBG) are increased by use of oral estrogen. The objective of this study was to determine whether postmenopausal women who used oral estrogen had higher serum concentrations of SHBG and lower serum concentrations of free testosterone (T) than nonusers, and whether free T was associated with lean body mass, particularly skeletal muscle mass. Subjects were 70 postmenopausal women, 46-55 yr old, 46 of whom used oral estrogen. Total and regional body composition were determined by dual-energy x-ray absorptiometry. Serum concentrations of SHBG, total T, and estradiol (E2) were determined by RIA. Free T was calculated from concentrations of total T and SHBG. Hormone users had higher serum concentrations of E2 and SHBG (182.0 ± 58.5 vs. 82.9 ± 41.1 nmol/L, mean ± SD, P < 0.001) and lower concentrations of free T (3.7 ± 2.2 vs. 7.9 ± 4.1 pmol/L, mean ± SD, P < 0.001); total T did not differ. Total lean mass and leg lean mass were significantly correlated with free, but not total T [r values of 0.29 (P < 0.05) and 0.31 (P < 0.01) for total and leg lean mass, respectively, vs. free T]; arm lean mass was not correlated with either measure of T. Serum E2 was significantly correlated with SHBG (r = 0.50, P < 0.001) and free T (r = -0.33, P < 0.01). These observations imply that, by reducing the concentration of bioavailable T, oral estrogen therapy may accelerate or augment lean mass loss among postmenopausal women. This conclusion awaits confirmation by longitudinal observation.