Levels of two hormones required for sperm production dropped greatly when 40 participants used it daily for a month, compared to a placebo, researchers found.
The experimental contraceptive is a modified testosterone that combines the actions of male hormone androgen and a progesterone.
The average testosterone level dropped as low as androgen deficiency, but the participants did not experience any severe side effects.
Named 11-Beta-MNTDC, the pill is a "sister compound" to dimethandrolone undecanoate (DMAU) the first potential male birth control pill to undergo testing by the same research team at Los Angeles Biomed Research Institute in California.
A multinational survey of 9,000 men in 2005 that found that 55 percent of men in stable relationships want to try new, hormonal male contraceptive methods if they are reversible.
The new study results were presented on March 24 at ENDO 19, the Endocrine Society's annual meeting in New Orleans.
Out of the 40 men involved, ten participants randomly received a placebo capsule.
The other 30 men received 11-beta-MNTDC but in different doses - 14 took a 200 mg dose and the remaining 16 took a 400mg dose.
Subjects took the drug or placebo once daily with food for 28 days.
The study found drug side effects were few, mild and included fatigue, acne or headache in four to six men each.
Five men reported a mildly decreased sex drive, and two men described mild erectile dysfunction - but sexual activity was not decreased.
No participant stopped taking the drug because of the side effects, and all passed safety tests.
The drug effects were reversed after the treatment stopped, according to the team.
It is now hoped the researchers will be able to do longer drugs trials because the drug would take at least 60 to 90 days to affect sperm production,
They plan longer studies, and if the drug is effective it will move to larger studies and then testing in sexually active couples.
Co-senior investigator, Dr Christina Wang, Associate Director of the Clinical and Translational Science Institute at Los Angeles Biomed Research Institute said: "Our results suggest that this pill, which combines two hormonal activities in one, will decrease sperm production while preserving libido.
"Safe, reversible hormonal male contraception should be available in about 10 years."
Effects due to low testosterone were minimal, according to co-senior investigator, Dr Stephanie Page.
The professor of Medicine at the University of Washington School of Medicine said: "11-beta-MNTDC mimics testosterone through the rest of the body but is not concentrated enough in the testes to support sperm production.
"The goal is to find the compound that has the fewest side effects and is the most effective.
"We are developing two oral drugs in parallel in an attempt to move the [contraceptive medicine] field forward."
It was funded by The Eunice Kennedy Shriver National Institute of Child Health and Human Development, which is developing 11-beta-MNTDC and other male contraceptives.