Where exactly is the body's calorimeter that decides whether muscle repair and synthesis occurs? The activity itself is fueled by glycogen and the repair is fueled by fat. Provided that carbohydrate restriction (and subsequent cortisol elevation) hasn't occurred and bodyfat stores aren't too low, there's no reason that an increase in muscle cannot occur amidst a net energy intake that is less than TDEE. It's certainly easier to create an anabolic milieu with over-eating, but it isn't necessary.

A caloric deficit is far less likely to negatively impact the endocrine system if the individual is creating that deficit with at least equal parts activity and food energy density reduction.

Bodybuilders refer to this as a "recomp" where they stay at roughly the same weight while losing fat and gaining muscle. Clearly, neither one is being maximized to its full extent at that kind of rate, but all told the amount of muscle gain is probably the same since none is lost during a traditional "cut."

Concurrent fat loss and muscle gain is not easy on any hypo/hyper-caloric diet. Untrained individuals can pull it off. Genetic lottery winners too. The extremely obese can do it too. Outside of those groups, fat loss requires caloric deficit while muscle gain requires caloric excess.

Thermodynamics are a bitch. ;-)

I gain muscle but I eat about twice as much as most of the paleo's on here. You will NOT gain muscle by starving your body. I do cardio every morning and lift weights 3 days a week after class and a few meals. I eat small meals several times a day totaling about 300-400 grams of protein. Click on my profile and see what I look like now. Now until summer I am cutting back on my fat intake so I will post more pics in a few months. I vow to show people that you do not need to follow the standard body building diet to get cut. Good luck to you!

There is a lot more leeway in the calories that you can eat, when taking inflammation and water retention out of the equation by just getting rid of processed foods, especially gluten, artificial flavorings, excessive sodium, and sugar.

I'm probably yet another of the "variable" folks here, being both fat, but very well trained with considerable muscle mass.

But I've found after a decade of "try anything" experimentation, the following (in the order of experimentation:

2003-2004 Classic LC Paleo: Strength gains (slowly), moderate bodyfat loss, fantastic health (2900kcal/day 30% protein, 60% fat, 10% carbs, 430lbs to 330lbs in one year)

2004-2008 Traditional Strongman/Powerlifter: Strength gains (fast), considerable bodyfat gain, mediocre health (GI distress "eat big = s**t big") (330lbs to 380lbs, hovering around 360 when not preparing for competition)

2008-2009 PSMF: Strength maintained (no gains, but no losses), massive bodyfat loss, poor health (GI distress, poor sleep, migraines) (1800kcal/day 85% protein, 380lbs to 315lbs in 5 months)

2009-2010 SAD (financial reasons): Strength loss, bodyfat gained, poor health (fatigue, GI distress, allergies) (variable kcal/day 315lbs back to 380lbs)

2010-2011 ZC Paleo: Strength maintained, rapid bodyfat loss, decent health (some mild fatigue, otherwise ok) (3200-3400kcal/day, 75% fat, >5% carbs, 20% protein 380lbs to 315lbs in 8 months)

2011 (5 months) SAD/Faileo (financially related, again): More strength loss, rapid bodyfat gained, poor health (GI distress, allergies, fatigue) (variable kcal/day, back to 363lbs)

2011-Present (November 25, 2011 to today) Modified Paleo: Strength gains moderate, moderate-to-rapid bodyfat loss, great health (2200-2400kcal/day, 12-15% carbs, 60% fat, 25% protein with two higher-carb days (30% carbs at the expense of protein) and 1-2 IF days (about 900kcal for a single meal), 363lbs to 339lbs as of this morning, 2mos, 12 days)

In the case of very high blood sugar/low insulin (pre/un-diagnosed Type I diabetes), a person will lose body fat like mad regardless of how much they eat. And presumably, they would maintain or gain muscle if they were lifting weights. Obviously this is not something that you can recreate to suit your needs, unless you are an insulin-dependant diabetic, but this issue has spurred insulin-bulimia in some diabetics who have realized that they can control their body fat levels by reducing their insulin.

In real life, though -- I've heard (anecdotally) of people eating hyper-calorically and lifting weights (heavy) with minimal carbohydrates (on the low-moderate range, i.e. sticking to green leafy, and/or cruciferous veggies), who build muscle and reduce body fat (or perhaps the act of building muscle makes the appearance of a lower body fat percentage). Check out Staci's story on Nerd Fitness (very inspirational -- photos included): Nerd Fitness: Meet Staci Your New Powerlifting Super Hero (wfs). Of course, it is an n=1 situation, but gives hope that it is possible.

Many of us are ill-equipped to answer your question because we don't tally calories.

I can say I eat to satiation every day, and it seems like I'm eating more satisfying food--particularly more fat--than I ever ate on a "diet" and yet I'm down about 40 pounds (estimated by clothing sizes and waist measurement.)

I'm also one of those people who stops losing weight/fat if I eat too little. For me, it seems to be important to vary from day-to-day (extra sometimes, less sometimes, skip entirely once in a while) and to make sure I'm satisfied when I do eat.

I eat one small meal (yogurt plus fruit) and a main meal (fruit-salad--fatty meat/cooked veggies.)

I thought one of the theorised effects of a low carbohydrate diets is that your body is put into a state where fatty-acids are freed from the adipose tissue allowing them to be used for fuel.

Thus in my mind one could eat the same amount or more calories and be in a state of wanting to burn them and thus be be more efficiently burning them over storing them. It's not just energy in energy out, but the propensity to use or store it.

Activity/use of course is paramount but this in my mind is one of the reasons why in my understanding low-carb diets are not hypo-caloric but if anything hyper-caloric.

Personally speaking I have increased my calories by about 500 to match my increased energy expenditure, not caused by exercise but rather now driven by having what feels like loads of surplus energy, and thus enabling me to want to be more active, build muscle and burn off more (taking the stairs over the lift).

This is what I love about managing my carbohydrates, seems to have put me into a position to actually eat more calories, not less. I dropped 9kg in 3 months and if anything I am struggling to maintain my weight.

Gain muscle yes. Hypercaloric diet and high intensity exercise is standard training table.

Lose weight yes. I lost 25 pounds eating 500 cal/day above BMR, combined with low intensity exercise.

Both. Doubtful. The best to hope for is preserving muscle mass with weight loss. I preserved leg muscle but my legs got thinner, and my upper body shrank (and not all of that was fat). If you want to gain muscle you should probably gain weight and muscle for a month or two then try to lose weight as a second step.