Higher rates of hip fracture and all fractures combined have been observed in urban compared with rural areas, but whether there are urban-rural differences in distal forearm fracture rates is less studied. The aim of this longitudinal study was to compare the incidence of forearm fracture in postmenopausal women in urban and rural areas in Norway and to investigate risk factors that could explain potential fracture differences. The study included data from 11,209 women aged 65 years or more who participated in two large health studies, the Tromsø Health Study in 1994–1995 and the Nord-Trøndelag Health Study in 1995–1997. Forearm bone mineral density (BMD) was measured by single-energy X-ray absorptiometry in a subsample of women (n = 7333) at baseline. All women were followed with respect to hospital-verified forearm fractures (median follow-up 6.3 years). A total of 9249 and 1960 women lived in areas classified as rural and urban, respectively. Urban women had an increased forearm fracture risk [relative risk (RR) = 1.29, 95% confidence interval (CI) 1.09–1.52] compared with women in rural areas. Rural women had higher body mass index (BMI) than urban women, and the RR was moderately reduced to 1.21 (95% CI 1.02–1.43) after BMI adjustments. Rural women had the highest BMD. In the subgroup with measured BMD, adjustments for BMD changed the urban versus rural RR from 1.21 (95% CI 0.96–1.52) to 1.05 (95% CI 0.83–1.32), suggesting that BMD is an important explanatory factor. In conclusion, higher rates of forearm fractures was found in urban compared with rural women. © 2011 American Society for Bone and Mineral Research.