Background: Previous studies have suggested that depression is associated with falls and with low bone density, but it is not known whether depression leads to an increased risk of fracture. Subjects and Methods: We conducted a prospective cohort study in elderly, white women who were recruited from population-based listings in the United States. At a second visit (1988-1990), 7414 participants completed the 15-item Geriatric Depression Scale and were considered depressed if they reported 6 or more symptoms of depression. We measured bone mineral density (BMD) in the spine and hip using dual energy x-ray absorptiometry at the second visit, and asked participants about incident falls (yes/no) at 4 follow-up visits. Nonvertebral fractures were ascertained for an average of 6 years following the depression measure, and verified radiologically. We determined incident vertebral fractures by comparing lateral spine films obtained at the first visit (1986-1988) with repeat films obtained an average of 3.7 years later (1991-1992). Results: The prevalence of depression (Geriatric Depression Scale score ≥ 6) was 6.3% (467/7414). We found no difference in mean BMD of the hip and lumbar spine in women with depression compared with those without depression. Women with depression were more likely to experience subsequent falls than women without depression (70% vs 59%; age-adjusted odds ratio [OR], 1.6; 95% confidence interval [CI], 1.3-1.9; P<.001) an association that persisted after adjusting for potential confounding variables (OR, 1.4; 95% CI, 1.1-1.8; P = .004). Women with depression had a 40% (age-adjusted hazard ratio [HR], 1.4; 95% CI, 12-1.7; P<.001) increased rate of nonvertebral fracture (124 fractures in 3805 woman-years of follow-up) compared with women without depression (1367 fractures in 59 503 woman-years of follow-up). This association remained strong after adjusting for potential confounding variables, including medication use and neuromuscular function (HR, 1.3; 95% CI, 1.1-1.6, P = .008). Further adjustment for subsequent fails appeared to explain part of this association (HR, 1.2; 95% CI, 1.0-1.5; P = .06). Women with depression were also more likely to suffer vertebral fractures than women without depression, adjusting for history of vertebral fracture, history of falling, arthritis, diabetes, steroid use, estrogen use, supplemental calcium use, cognitive function, and hip BMD (OR, 2.1; 95% CI, 1.4-3.2; P<.001). Conclusions: Depression is a significant risk factor for fracture in older women. The greater frequency of falls among individuals with depression partially explains this finding. Other mechanisms responsible for the association between depression and fracture remain to be determined.