Testosterone treatment of men with low testosterone is common and, although relatively short-term, has raised concern regarding an increased risk of prostate cancer (CaP). We investigated the association between modest-duration testosterone treatment and incident aggressive CaP. Retrospective inception cohort study of male Veterans aged 40 to 89 years with a laboratory-defined low testosterone measurement from 2002 to 2011 and recent prostate specific antigen (PSA) testing; excluding those with recent testosterone treatment, prostate or breast cancer, high PSA or prior prostate biopsy. Histologically-confirmed incident aggressive prostate cancer or any prostate cancer were the primary and secondary outcomes, respectively. Of the 147,593 men included, 58,617 were treated with testosterone. 313 aggressive CaPs were diagnosed, 190 among untreated men (incidence rate (IR) 0.57 per 1000 person years, 95% CI 0.49-0.65) and 123 among treated men (IR 0.58 per 1000 person years; 95% CI 0.48-0.69). After adjusting for age, race, hospitalization during year prior to cohort entry, geography, BMI, medical comorbidities, repeated testosterone and PSA testing, testosterone treatment was not associated with incident aggressive CaP (HR 0.89; 95% CI 0.70-1.13) or any CaP (HR 0.90; 95% CI 0.81-1.01). No association between cumulative testosterone dose or formulation and CaP was observed. Among men with low testosterone levels and normal PSA, testosterone treatment was not associated with an increased risk of aggressive or any CaP. The clinical risks and benefits of testosterone treatment can only be fully addressed by large, longer-term randomized controlled trials.