Context: Sclerostin, a protein secreted by osteocytes, inhibits bone formation. Individuals with genetic mutations that decrease the availability of sclerostin have very high bone mass. Objective: The aim of this study was to examine the hypothesis that elevated serum sclerostin levels are associated with increased risk of hip fracture in older women. Design, Setting, and Participants: This was a case-cohort study of a prospective, community-based cohort of 9704 women aged 65 yr or older. Sclerostin levels were measured in serum collected in 1989-1990 in 228 women with incident hip fractures and 227 women in a randomly selected sample; average follow-up time was 9.8 yr. Results: Serum sclerostin levels were correlated with total hip bone mineral density (BMD; r=0.27, P<0.001). The risk of hip fracture increased across quartiles of serum sclerostin (test for trend, P< 0.001) and was significantly elevated among those in the fourth quartile (hazard risk 3.4, 95% confidence interval 1.7-7.0) compared with women in the lowest quartile, after adjusting for age, body mass index, estrogen use, history of fracture since age 50 yr, and total hip BMD. When dividing the cohort into eight groups by sclerostin quartile and median hip BMD, women with lower total hip BMD in the highest sclerostin quartile had a 22.3-fold (95% confidence interval 5.8-86.3) increased risk of fracture compared with women with higher total hip BMD in the lowest sclerostin quartile. Conclusions: We conclude that higher serum sclerostin levels are associated with a greater risk of hip fractures in older women. In addition, the risk of hip fracture is amplified when high sclerostin levels are combined with lower BMD.