The immunocompetence handicap hypothesis (ICHH) proposes that testosterone has both beneficial effects on male reproductive potential and negative effects by suppressing the immune system. However, support for the ICHH has been variable and an alternative hypothesis suggests that testosterone may be acting indirectly via cortisol to suppress immunity (the stress-linked ICHH). A third hypothesis is that increased energetic investment in immunity results in the suppression of testosterone. We tested these hypotheses in male Cape ground squirrels (Xerus inauris) through two separate manipulations: first, by triggering a strong immune response using a lipopolysaccharide (LPS) injection and, secondly, by increasing circulating testosterone using silastic testosterone implants. Responding to an immune challenge significantly reduced testosterone, supporting the immune suppression hypothesis, while increasing circulating testosterone had no effect on immunocompetence, body mass, ectoparasite abundances or cortisol levels, failing to support either the ICHH or stress-linked ICHH. Our results add to the increasing body of literature that challenges the ICHH, and we conclude that the trade-off between testosterone and immunity is mediated through immune activation and not through testosterone in male Cape ground squirrels. Being able to test the ICHH, stress-linked ICHH and immune suppression hypotheses in a free-ranging mammal gives us a unique opportunity to examine the mechanisms mediating this trade-off.