Context: Bone marrow fat (BMF) and bone mineral density (BMD) by dual x-ray energy absorptiometry (DXA) are negatively correlated. However, little isknownabout the association of BMF with fracture or with separate trabecular and cortical bone compartments. Objective: Our objective was to assess the relationships between vertebral BMF, BMD by quantitative computed tomography, and fracture in older adults. Design, Setting, and Participants: We conducted a cross-sectional study in the Age Gene/Environment Susceptibility-Reykjavik cohort. Main Outcome Measures: Outcomes measures included vertebral BMF(L1-L4) measured with magnetic resonancespectroscopy, quantitative computed tomography and DXA scans of the hip and spine, and DXA vertebral fracture assessments. Previous clinical fracture was determined from medical records. Results: In 257 participants without recent bone-active medication use, mean age was 79 (SD 3.1) years. Mean BMF was 53.5% ± 8.1% in men and 55.0% ± 8.4% in women. Those with prevalent vertebral fracture (21 men, 32 women) had higher mean BMF in models adjusted for BMD. In separate models by sex, the difference was statistically significant only inmen(57.3% vs 52.8%, P = 0.02). BMF was associated with lower trabecular volumetric BMD (vBMD) at the spine (-10.5% difference for each 1 SDincrease in BMF, P < 0.01), total hip, and femoral neck, but not with cortical vBMD, in women. In men, BMF was marginally associated with trabecular spine vBMD (-6.1%, P = 0.05). Total hip and spine areal BMD (aBMD) were negatively correlated with BMF in women only. Conclusion: Higher marrow fat correlated with lower trabecular, but not cortical, BMD in older women but not men. Higher marrow fat was associated with prevalent vertebral fracture in men, even after adjustment for BMD.