Bisphosphonates reduce the rate of osteoporotic fractures in clinical trials and community practice. “Atypical” nontraumatic fractures of the diaphyseal (subtrochanteric or shaft) part of the femur have been observed in patients taking bisphosphonates. We calculated the incidence of these fractures within a defined population and examined the incidence rates according to duration of bisphosphonate use. We identified all femur fractures from January 1, 2007 until December 31, 2011 in 1,835,116 patients older than 45 years who were enrolled in the Healthy Bones Program at Kaiser Southern California, an integrated health care provider. Potential atypical fractures were identified by diagnostic or procedure codes and adjudicated by examination of radiographs. Bisphosphonate exposure was derived from internal pharmacy records. The results showed that 142 patients had atypical fractures; of these, 128 had bisphosphonate exposure. There was no significant correlation between duration of use (5.5 ± 3.4 years) and age (69.3 ± 8.6 years) or bone density (T-score −2.1 ± 1.0). There were 188,814 patients who had used bisphosphonates. The age-adjusted incidence rates for an atypical fracture were 1.78/100,000/year (95% confidence interval [CI], 1.5–2.0) with exposure from 0.1 to 1.9 years, and increased to 113.1/100,000/year (95% CI, 69.3–156.8) with exposure from 8 to 9.9 years. We conclude that the incidence of atypical fractures of the femur increases with longer duration of bisphosphonate use. The rate is much lower than the expected rate of devastating hip fractures in elderly osteoporotic patients. Patients at risk for osteoporotic fractures should not be discouraged from initiating bisphosphonates, because clinical trials have documented that these medicines can substantially reduce the incidence of typical hip fractures. The increased risk of atypical fractures should be taken into consideration when continuing bisphosphonates beyond 5 years. © 2012 American Society for Bone and Mineral Research.