Raloxifene is a selective estrogen receptor modulator that in experimental animals acts as an estrogen receptor antagonist in breast and endometrium but as an estrogen receptor agonist in the skeletal and cardiovascular systems. We conducted a 1-year prospective, randomized, double-blind trial in 143 postmenopausal osteoporotic women (mean ± SD age, 68.4 ± 5.0 years) with at least one prevalent vertebral fractures and low bone mineral density (BMD), comparing groups receiving raloxifene at 60 mg/day (RLX60) or 120 mg/day (RLX120) and a control group receiving supplements of 750 mg/day of calcium and 400 IU/day of vitamin D. There were no differences among groups in the occurrence of uterine bleeding, thrombophlebitis, breast abnormalities, or increased endometrial thickness (assessed by ultrasonography). As compared with controls, the changes in values over 1 year for RLX60 and RLX120, respectively, were significant for serum bone alkaline phosphatase (−14.9%, −8.87%), serum osteocalcin (−20.7%, −17.0%), and urinary C-telopeptide fragment of type I collagen/creatinine (−24.9%, −30.8%), markers of bone turnover; for serum total cholesterol (−7.0% for RLX60) and low density lipoprotein cholesterol (LDL) (−11.4% for RLX60) and for the LDL/HDL cholesterol ratio (−13.2%, −8.3%). BMD increased significantly in the total hip (1.66% for RLX60) and ultradistal radius (2.92%, 2.50%). There were nonsignificant trends toward increases over controls in BMD for lumbar spine, total body, and total hip (for RLX120). Using a >15% cutoff definition, raloxifene had no effect on incident fractures, but using a >30% cutoff, there was a dose-related reduction (p = 0.047). We conclude that raloxifene therapy is well tolerated, reduces serum lipids, and does not stimulate the uterus or breasts. It has beneficial effects on bone, although, under the conditions of this study, these appear to be of a smaller magnitude than have been reported with estrogen therapy.