Testosterone deficiency causes mild anemia. Whether testosterone replacement therapy (TRT) can correct anemia or prevent the development of anemia in men with hypogonadism remains incompletely understood. To assess the efficacy of TRT in correcting anemia in men with hypogonadism and anemia, and reducing the risk of developing anemia in those without anemia. This randomized, placebo-controlled trial included men with hypogonadism at 316 US sites enrolled between May 2018 and February 2022. This study was nested within the Testosterone Replacement Therapy for Assessment of Long-term Vascular Events and Efficacy Response in Hypogonadal Men (TRAVERSE) Study, which evaluated the effect of TRT on major adverse cardiovascular events in middle-aged and older men with hypogonadism. Eligible participants were aged 45 to 80 years, with 2 testosterone concentration results below 300 ng/dL, hypogonadal symptoms, and cardiovascular disease (CVD) or increased CVD risk. The last study visit took place in January 2023. Data were analyzed between March and August 2023. Participants were randomized with stratification for preexisting CVD to 1.62% testosterone gel or placebo gel daily for the study duration. Proportion of participants with anemia (hemoglobin below 12.7 g/dL) whose anemia remitted (hemoglobin 12.7 g/dL or above) over the study duration. Secondary end points included incidence of anemia among men who were not anemic. Binary end points were analyzed using repeated-measures log-binomial regression. A total of 5204 men were included, 815 with anemia (mean [SD] age, 64.8 [7.7] years; 247 Black [30.3%], 544 White [66.7%], 24 other [2.9%]) and 4379 without anemia (mean [SD] age, 63.0 [7.9] years; 629 Black [14.4%], 3603 White [82.3%], 147 other [3.4%]). Anemia corrected in a significantly greater proportion of testosterone-treated than placebo-treated men at 6 months (143 of 349 [41.0%] vs 103 of 375 [27.5%]), 12 months (152 of 338 [45.0%] vs 122 of 360 [33.9%]), 24 months (124 of 290 [42.8%] vs 95 of 307 [30.9%]), 36 months (94 of 216 [43.5%] vs 76 of 229 [33.2%]), and 48 months (41 of 92 [44.6%] vs 38 of 97 [39.2%]) (P = .002). Among participants without anemia, a significantly smaller proportion of testosterone-treated men developed anemia than placebo-treated men. Changes in hemoglobin were associated with changes in energy level. In middle-aged and older men with hypogonadism and anemia, TRT was more efficacious than placebo in correcting anemia. Among men who were not anemic, a smaller proportion of testosterone-treated men developed anemia than placebo-treated men. ClinicalTrials.gov Identifier: NCT03518034.