We reported that weight loss induces bone loss which is prevented by exercise training; however, the mechanism for this observation remains unclear. Sclerostin, an inhibitor of bone formation, has been found to increase in states of unloading and may mediate the changes in bone metabolism associated with weight loss and exercise. The objective of the study was to determine the effect of lifestyle intervention in obese older adults on sclerostin levels, and on hip geometry parameters. A total of 107 obese (body mass index [BMI] ≥ 30 kg/m2) older (≥65 years) adults were randomly assigned to control, diet, exercise, and combined diet-exercise for 1 year. Sclerostin levels were measured by ELISA at baseline, 6 months, and 12 months, while hip geometry parameters were obtained from bone mineral density (BMD) images done by dual-energy X-ray absorptiometry using hip structure analysis at baseline and 12 months. Both the diet and diet-exercise groups had significant decreases in body weight (−9.6% and −9.4%, respectively), whereas weight was stable in the exercise and control groups. Sclerostin levels increased significantly and progressively in the diet group (6.6% ± 1.7% and 10.5% ± 1.9% at 6 and 12 months, respectively, all p < 0.05), whereas they were unchanged in the other groups; in particular, they were stable in the diet-exercise group (0.7% ± 1.6% and 0.4% ± 1.7% at 6 and 12 months, respectively, all p = 0.05). Hip geometry parameters showed significant decreases in cross-sectional area, cortical thickness, and BMD; and increases in buckling ratio at the narrow neck, intertrochanter, and femoral shaft. These negative changes on bone geometry were not observed in the diet-exercise group. Significant correlations between changes in sclerostin and changes in certain hip geometry parameters were also observed (p < 0.05). In conclusion, the increase in sclerostin levels with weight loss that was prevented by exercise may partly mediate the negative effects of weight loss on bone metabolism and the osteoprotective effect of exercise training. © 2012 American Society for Bone and Mineral Research.