Our review focuses on findings from mammals as part of a Special Issue "30th Anniversary of the Challenge Hypothesis". Here we put forth an integration of the mechanisms through which testosterone controls territorial behavior and consider how reproductive experience may alter these mechanisms. The emphasis is placed on the function of socially induced increases in testosterone (T) pulses, which occur in response to social interactions, as elegantly developed by Wingfield and colleagues. We focus on findings from the monogamous California mouse, as data from this species shows that reproductive status is a key factor influencing social interactions, site fidelity, and vigilance for offspring defense. Specifically, we examine differences in T pulses in sexually naïve versus sexually experienced pair bonded males. Testosterone pulses influence processes such as social decision making, the winner-challenge effect, and location preferences through rewarding effects of T. We also consider how social and predatory vigilance contribute to T pulses and how these interactions contribute to a territory centered around maximizing reproduction. Possible underlying mechanisms for these effects include the nucleus accumbens (rewarding effects of testosterone), hippocampus (spatial memories for territories), and the bed nucleus of the stria terminalis (social vigilance). The development of the challenge effect has provided an ideal framework for understanding the complex network of behavioral, environmental, physiological and neural mechanisms that ultimately relates to competition and territoriality across taxa. The opportunity to merge research on the challenge effect using both laboratory and field research to understand social behavior is unparalleled.