Raloxifene reduces vertebral fracture risk in postmenopausal women with osteoporosis and established osteoporosis, but its efficacy in women with osteopenia has not been studied. The objective of this study was to evaluate the effect of raloxifene hydrochloride on the risk of vertebral fractures in postmenopausal women with osteopenia and to compare this effect with that in women with osteoporosis as defined by the bone mineral density (BMD) T-score at the hip. We studied the 3204 postmenopausal women with osteopenia or osteoporosis without vertebral fractures at baseline in the Multiple Outcomes of Raloxifene Evaluation trial. Compared with placebo, 60 mg/day raloxifene reduced the risk of new vertebral fractures at 3 years independent of baseline total hip BMD. The relative risk for new vertebral fractures for the raloxifene group compared with placebo was 0.53 (95% CI, 0.32-0.88) for those with osteopenia and 0.31 (0.06-0.71) for those with osteoporosis. In raloxifene-treated women the rate of vertebral fracture was similar in women with osteoporosis (2%) to that in women with osteopenia (1.9%). For clinically apparent vertebral fractures, the relative risk of fracture in the osteopenia group for raloxifene was 0.25 (0.04-0.63) compared with placebo. There were no new clinical vertebral fractures in women with osteoporosis receiving raloxifene, whereas four occurred in the placebo group. We conclude that treatment with 60 mg/day raloxifene significantly decreases the risk of new vertebral fractures and new clinical vertebral fractures in postmenopausal women without baseline vertebral fracture who have osteopenia or osteoporosis.