A contribution to a special issue on Hormones and Human Competition. Social competition is associated with marked emotional, behavioral and hormonal responses, including changes in testosterone levels. The strength and direction of these responses is often modulated by levels of other hormones (e.g. cortisol) and depends on psychological factors - classically, the objective outcome of a competition (win vs. loss) but also, hypothetically, the closeness of that outcome (e.g. decisive victory vs. close victory). We manipulated these two aspects of a social contest among male participants (N=166), to investigate how testosterone and affect fluctuated as a function of clear vs. narrow wins and clear vs. narrow losses. We found that losing a competition by a small margin (a narrow loss) was experienced as more pleasant than a clear loss. Among individuals with higher levels of basal cortisol, winning the competition by a narrow margin was associated with a decrease in testosterone levels. These findings are discussed within the framework of the status instability hypothesis and the growing literature on how situational and physiological factors modulate testosterone reactivity to social contests.