Objective To investigate associations between testosterone levels and major depressive disorder (MDD) in older men and women. Methods In a cross-sectional, 2-year prospective analyses within the Netherlands Study on Depression in Older persons cohort study, 469 participants comprised 350 patients with MDD and 119 nondepressed participants in the comparison group (mean age 70.5 ± 7.3 years; 166 [35.4%] men). MDD was assessed by the Composite International Diagnostic Interview. Baseline plasma total testosterone and sex hormone binding globulin (SHBG) were assessed to calculate free testosterone. The Inventory of Depressive Symptomatology was assessed every 6 months. Results Whereas SHBG levels did not differ between the depressed/nondepressed groups (F(1,149) = 0.075, p = 0.78), men with MDD had lower mean total and free testosterone levels than the comparison group in the multivariate adjusted analyses (F(1,150) = 7.249, p = 0.008, Cohen's d = 0.51; and F(1,149) = 8.548, p = 0.004 Cohen's d = 0.55, respectively). This could be ascribed to lower testosterone in men with “pure” MDD and not in men with MDD and comorbid anxiety. Nine men (5.4%) had a total testosterone level < 8 nmol/L, of whom 8 suffered from MDD. In women, hormone levels showed no significant difference between the groups. In men (using all five measurement points during follow-up) baseline free testosterone was inversely associated with depression severity in the adjusted analyses (β = −0.15, t(151) = −2.15, p = 0.03). Conclusion Testosterone levels were lower in men with MDD compared with healthy men after adjustment for confounders, such as body mass index. No significant associations were found in women.