Thirty obese women were randomly assigned to either 40% [severe energy restriction (SER)] or 70% [moderate energy restriction (MER)] of their maintenance energy requirements and to no exercise, aerobic exercise (walking), or aerobic exercise plus circuit weight training. Body composition by hydrostatic weighing and energy expenditure by indirect calorimetry were measured at 0, 3, and 6 mo. In addition, we developed a deficit-efficiency factor (DEF), calculated as body energy loss/dietary energy deficit, to attempt to quantify the effectiveness of the weight-reduction interventions. Subjects in the SER group lost more weight (x̄ ± SE: 15.1 ± 1.4 vs 10.8 ± 1.0 kg), fat (11.7 ± 1.1 vs 8.3 ± 0.6 kg), and fat-free mass (2.8 ± 0.3 vs 1.8 ± 0.3 kg) than the MER group (P ≤ 0.05). However, the overall DEF was greatest in the MER group (0.80 ± 0.07) compared with the SER group (0.52 ± 0.05; P ≤ 0.01). Exercise had no significant effect. This study demonstrates that MER may offer an advantage over SER because it produces a greater energy loss relative to energy deficit.