yes, in the testicles.

Your testicles make testosterone, it all starts with the hypothalamus and pituitary glands that release hormones into the blood stream that yell the testicles to start producing and releasing testosterone

definitely in the nuts, we learned that in 7th grade health class.

It’s made in the nut factory

The above answers have it right. Cf. estrogen, which is produced by the ovaries (the female analogue of the testicles). Despite the term "gonad" coming to just mean "balls" in common parlance, it's actually a gender-neutral term, and ovaries are the female gonads. Gonads produce the primary sex hormones (as well as the gametes--eggs and sperm) in animals.

(Yes, I find biology interesting).

yes but not enough to have effects of decreased testosterone in your body. We boys masturbate testosterone production increases andd shortly after ejaculation the testosterone levels return to normal levels

that's why you have to keep them safe during sports

I don't believe so. The testicles are not just one big open space inside - they have a structure and two sets of cells, one set to make sperm (Sertoli cells) and the other to make testosterone (Leydig cells).

The cells that make sperm are organised around tubules which join up to form bigger tubes which lead the sperm into the epididymis to mature.

The testicles also have a blood supply and the cells that make testosterone release it into this blood i.e. for each testicle there will be an artery going in and a vein going out and the blood in the vein will have more testosterone in it than the blood in the artery going in.

The other thing worth knowing is that there is a negative feedback system. Chris already mentioned the hypothalamus and the pituitary. The hypothalamus measures the amount of testosterone in the blood and, if it isn't enough, it makes more GnRH which causes the pituitary gland to make more FSH and LH and the increased level of LH causes the Leydig cells to make more testosterone. If the testosterone level is too high the hypothalamus makes less GnRH causing the pituitary to make less FSH and LH and therefore the Leydig cells make less testosterone.

That means even if there was some leakage of testosterone into the tubules and thus through the epididymis, up the vas deferens and eventually ejaculated with the sperm:

1. The feedback mechanism would compensate by having the testicles make more testosterone.
   
2. Refraining from ejaculating would not change that - to be active testosterone needs to be in the blood, not in the tubes that carry the sperm.
   

One situation in which people seem to be concerned with this is the idea that one should refrain for sexual activity piror to a sporting competition. This has not been well studied but, as far as anyone found any effect, it seems to be more that immediately after orgasm, when we're feeling really mellow, we may not have the drive to excel at competition. But, just as the horniness soon returns, the mellow feeling is also time limited. It may be unwise to enjoy an orgasm five minutes before you're due out on the field but any effect would be much less if it was the night before and, by 24hrs, there seems to be no measurable effect,