Sclerostin regulates bone formation by inhibiting Wnt pathway signaling. Low circulating sclerostin levels cause high bone mass. We hypothesized that postmenopausal women with increased sclerostin levels have a greater risk for osteoporosis-related fractures. We examined the association between circulating sclerostin together with bone turnover markers and osteoporosis-related fracture risk in 707 postmenopausal women, in a population-based study with a mean follow-up period of 5.2 ± 1.3 years. Multivariate Cox proportional hazards regression models were used to analyze fracture risk, adjusted for age, body mass index, and other confounding risk factors. High sclerostin levels were strongly associated with increased fracture risk. After adjustment for age and other confounders, the relative fracture risk was more than sevenfold among postmenopausal women for each 1-SD increment increase in sclerostin level. Women in the highest quartile of sclerostin levels had about a 15-fold increase in fracture risk. Results were similar when we compared sclerostin at the 1-year visit to an average of two to three annual measurements. Fracture risk attributable to sclerostin levels was 56.6% in the highest quartile. Only high levels of bone resorption markers (plasma cross-linked C-terminal telopeptide of type 1 collagen [p-CTx], urinary CTx [u-CTx], and urinary N-telopeptide of type 1 collagen [u-NTx]) were predictive of osteoporosis-related fractures but at much lower hazard ratio (HR) values than that of serum sclerostin. Associations between sclerostin levels and fracture risk were independent of bone mineral density and other confounding risk factors. High sclerostin levels are a strong and independent risk factor for osteoporosis-related fractures among postmenopausal women. © 2012 American Society for Bone and Mineral Research.