Dutasteride (Avodart) is a potent inhibitor of the 5-alpha-reductase enzyme (5-AR) indicated for treatment of benign prostatic hyperplasia (BPH); like finasteride (Proscar, Propecia), it belongs to a class of compounds known as 5-AR inhibitors. Dutasteride is sometimes prescribed off-label for treatment of male pattern baldness (MPB) or androgenic alopecia (AA). 5-AR inhibitors prevent enzymatic conversion of testosterone into the more potent dihydrotestosterone (DHT); the net effect of these compounds is anti-androgenic. Of the three distinct isoforms of 5-AR enzyme (isozymes), finasteride is selective for types II and III; dutasteride inhibits the action of all three.
The primary role of 5-alpha-reductase in physiology is in the enzymatic conversion of the steroid hormone testosterone to the more-potent dihydrotestosterone. Although testosterone is best known popularly as the “male” hormone, testosterone and DHT both act in key roles in adult physiology as well as in utero and during development in each sex. In males DHT exerts unique action by binding to the androgen receptors found in skeletal muscle, the prostate, vocal cords, and hair follicles to induce masculinization. As a powerfully androgenic hormone (two to ten times more potent than testosterone), DHT level also modulates libido, strength (through direct AR-mediated effect on skeletal muscle and also as a neuroactive steroid with neurosteroid metabolites) and muscle mass, in women as well as in men.
DHT also plays a role in the etiology of several states of disease or dysfunction. DHT is implicated in benign prostatic hypertrophy and androgenic alopecia, as well as proliferation of cancer cells in most forms of prostate cancer.
Acting through similar mechanisms to reduce DHT levels, finasteride and dutasteride are sometimes considered interchangeable (though finasteride is approved commercially for prevention of androgenic alopecia as well prostate cancer, whereas dutasteride is only indicated for prostate cancer); however, Naslund et al find a significant treatment cost difference in favor of dutasteride therapy for elderly men with enlarged prostates.
Taken in proper doses, regularly, and with physician supervision dutasteride has been deemed safe and effective; however, some published literature suggests there may be a little-understood connection between dutasteride and sexual dysfunction:
The connection between 5ARIs and sexual dysfunction is apparent upon review of the literature. Though theories have been proposed, little is known about the exact mechanisms behind 5ARI-related sexual dysfunction. Since the connection between 5ARIs and sexual AEs is established in the literature, future research should be directed toward deciphering the pathophysiologic mechanisms. When more basic science knowledge is attained in this area, the focus can shift toward prevention and treatment. 
Though dutasteride is approved for BPH, it is often prescribed off-label in lieu of Propecia-branded finasteride for the treatment of male pattern baldness (MPB). There is clinical evidence in support of this practice; Eun et al demonstrated that “0.5 mg of dutasteride improved hair growth and was relatively well tolerated for the treatment of male pattern hair loss.”
Yamana K, Labrie F, Luu-The V. "Human type 3 5α-reductase is expressed in peripheral tissues at higher levels than types 1 and 2 and its activity is potently inhibited by finasteride and dutasteride". Hormone Molecular Biology and Clinical Investigation, 2010 Jan; 2 (3).
Mozayani A; Raymon F. Handbook of Drug Interactions: A Clinical and Forensic Guide. Springer Science & Business Media, 2011.
Pöllänen E, Kangas R, Horttanainen M, Niskala P, Kaprio J, Butler-Browne G, Mouly V, Sipilä S, Kovanen V. Intramuscular sex steroid hormones are associated with skeletal muscle strength and power in women with different hormonal status. Aging Cell. 2015 Apr;14(2):236-48.
 Naslund M, Eaddy MT, Kruep EJ, Hogue SL. Cost comparison of finasteride and dutasteride for enlarged prostate in a managed care setting among Medicare-aged men. Am J Manag Care. 2008 May;14(5 Suppl 2):S167-71.
 Erdemir F, Harbin A, Hellstrom WJ. 5-alpha reductase inhibitors and erectile dysfunction: the connection. J Sex Med. 2008 Dec;5(12):2917-24.
 Eun HC, Kwon OS, Yeon JH, Shin HS, Kim BY, Ro BI, Cho HK, Sim WY, Lew BL, Lee WS, Park HY, Hong SP, Ji JH. Efficacy, safety, and tolerability of dutasteride 0.5 mg once daily in male patients with male pattern hair loss: a randomized, double-blind, placebo-controlled, phase III study. J Am Acad Dermatol. 2010 Aug;63(2):252-8.