Postmenopausal osteoporosis and bone mass are influenced by multiple factors including genetic variation. The importance of LDL receptor-related protein 5 (LRP5) for the regulation of bone mass has recently been established, where loss of function mutations is followed by severe osteoporosis and gain of function is related to increased bone mass. The aim of this study was to evaluate the role of polymorphisms in the LRP5 gene in regulating bone mass and influencing prospective fracture frequency in a well-described, large cohort of normal, ambulatory Australian women. A total of 1301 women were genotyped for seven different single nucleotide polymorphisms (SNPs) within the LRP5 gene of which five were potentially informative. The effects of these gene polymorphisms on calcaneal quantitative ultrasound measurements (QUS), osteodensitometry of the hip and bone-related biochemistry was examined. One SNP located in exon 15 was found to be associated with fracture rate and bone mineral density. Homozygosity for the less frequent allele of c.3357A > G was associated with significant reduction in bone mass at most femoral sites. The subjects with the GG genotype, compared to the AA/AG genotypes showed a significant reduction in BUA and total hip, femoral neck and trochanter BMD (1.5% P = 0.032; 2.7% P = 0.047; 3.6% P = 0.008; 3.1% P = 0.050, respectively). In the 5-year follow-up period, 227 subjects experienced a total of 290 radiologically confirmed fractures. The incident fracture rate was significantly increased in subjects homozygous for the GG polymorphism (RR of fracture = 1.61, 95% CI [1.06–2.45], P = 0.027). After adjusting for total hip BMD, the fracture rate was still increased (RR = 1.67 [1.02–2.78], P = 0.045), indicating factors other than bone mass are of importance for bone strength. In conclusion, genetic variation in LRP5 seems to be of importance for regulation of bone mass and osteoporotic fractures.