Protein deficiency is known to cause ectopic fat accumulation in the liver. The aim of this study was to analyse the mechanism of suppression of hepatic fat accumulation by testosterone and to clarify the mechanism behind the gender difference in fatty liver formation due to protein deficiency. Hepatic fat accumulation due to protein deficiency was evaluated in male and female rats before and after sexual maturation. Then, the effects of testosterone on liver lipid, muscle protein metabolism and energy expenditure in adipose tissue were investigated in castrated or testosterone-injected male rats fed control or protein-restricted diet. Hepatic triglyceride accumulation diminished with sex maturation in male but not in female protein-restricted rats. Protein restriction resulted in a significant increase in hepatic triglyceride content in castrated rats but not in sham-operated rats demonstrating that endogenous testosterone reduces hepatic lipid accumulation in male rats. Protein restriction reduced plasma IGF-I and muscle protein synthesis measured using the SUnSET method. Castration increased the plasma corticosterone level and muscle autophagic activity. Muscle weight was reduced and energy expenditure in adipose tissue was increased only when both factors were combined. Muscle protein synthesis downregulation owing to protein restriction and activation of autophagy following castration reduced muscle mass thereby releasing surplus energy and promoting steatosis in protein-restricted castrated rats despite increased energy expenditure in adipose tissue. We hypothesize that endogenous testosterone reduces hepatic lipid accumulation in protein-deficient male rats and provide novel findings on the gender-specific differences in hepatic steatosis.