Introduction: Aromatization of exogenous testosterone might result in increased estradiol levels. Concerns have been raised about undesired estrogenic effects in assigned female at birth (AFAB) transgender people. How serum estradiol levels change after initiation of testosterone therapy and if these levels should be monitored, remains unclear. Methods: This prospective cohort study was part of the European Network for the Investigation of Gender Incongruence (ENIGI). Serum levels of sex steroids were assessed in 746 AFAB transgender people during a three-year follow-up period, starting at the initiation of hormone treatment. Results: Estradiol levels decreased from median [P25-P75] 45.5[24.0-102.2]pg/mL to 36.5[25.0-46.2]pg/mL over three years (P<0.001), a change was already noticeable during the first three months (mean - 17.1 pg/mL, 95% CI -23.8 - -10.6, P<0.001). Serum estradiol levels were lower in people without endogenous estradiol production (contraceptive users or post gonadectomy) at baseline and after three months, compared to people with endogenous estradiol production. Using long acting testosterone undecanoate injections resulted in a more prominent decrease in serum estradiol values over twelve months, compared to short acting mixed testosterone esters (P<0.001) or testosterone gel (P=0.001). Changes in serum estradiol were positively correlated to changes in LH (ρ = 0.107, P<0.001) and negatively correlated to changes in FSH levels (ρ=-0.167, P<0.001) and body mass index (ρ=-0.082, P<0.001). Conclusion: Testosterone administration in AFAB transgender people results in decreasing serum estradiol levels. Although an underlying mechanism for the observed decrease in serum estradiol levels remains difficult to fathom, our results suggest that testosterone administration suppresses endogenous estradiol production. The exception found in people without endogenous estradiol production may be attributed to aromatization of exogenous testosterone.