Originally Posted by Saucemaster
Gaining muscle ups your metabolism, increasing your daily energy needs, which means that you can drop fat faster once you start cutting those calories. However, to gain muscle, you need to have a surplus of calories in your diet--which means, despite your best efforts, you're basically going to end up gaining both muscle and fat, though if you eat right and train well, it will be more of the former than the latter. The only way you're really going to lose fat is to cut calories, and that's when the extra muscle will make a difference. Generally speaking, though, serious muscle gain and significant fat loss are almost mutually exclusive.