The big picture: Testosterone in the blood can be either bound or free. Free testosterone is sometimes a better marker for testosterone deficiency than total testosterone.

Free vs bound testosterone: Only 1-2% of testosterone circulates free in the blood.

Bound testosterone is attached to proteins such as albumin or sex hormone-binding globulin (SHBG). Most testosterone is bound to SHBG.
But testosterone molecules that are bound to other proteins cannot enter most of your cells.
Free testosterone, the active form, is all the remaining testosterone that is not bound to other substances. It is the form that is most available for use by the body.
Your body actively uses free testosterone since they are at liberty to enter the body’s cells—unimpeded by SHBG or albumin—to carry out their function as signaling molecules that regulate metabolism and other cellular functions.

Men vs women: In men, about 45-65% of testosterone binds to a protein called SHBG, which carries hormones through the bloodstream. The remaining 35-55% is readily available for use, called free testosterone. In women, more than 66-78% of testosterone binds to SHBG, resulting in less free testosterone circulating in the body

Free testosterone tells us more than total testosterone. It can shed light on why you may be experiencing signs of testosterone deficiency even if your total testosterone levels are normal.

You could have normal total testosterone levels, but still suffer from symptoms of testosterone deficiency because you don’t have normal free testosterone levels (a low free testosterone concentration can be due to high SHBG levels in your blood).
Symptoms of testosterone deficiency aren’t only caused by the total amount of testosterone in your blood. The level of free testosterone matters too because free testosterone is what your body has readily available in the bloodstream.
According to some research, free testosterone levels are a better predictor of testosterone deficiency symptoms than levels of total testosterone are.

Low levels of total testosterone don’t necessarily point to a testosterone-related health issue, since this might be simply a “side effect” of something else going on in your body.

For example, obesity can lead to a decrease in total testosterone levels since insulin resistance—a common consequence of obesity—lowers SHBG levels, causing total testosterone levels to drop, as well. However, in a scenario like this, free testosterone is often not affected and remains at a normal level.