Handgrip strength (HGS) is a potentially useful objective parameter to predict fracture since it is an indicator of general muscle strength and is associated with fragility and propensity to fall. Our objective was to examine the association of HGS with fracture, to evaluate the accuracy of HGS in predicting incident fracture, and to identify subjects at risk of fracture. We analyzed a cross-sectional cohort with 2,793 subjects (1,217 men and 1,576 women aged 50-101 years) and a subset of 1,702 subjects which were followed for a total of 4,855 person-years. The primary outcome measures were prevalent fractures and incident major fragility fractures. Each standard deviation (SD) reduction in HGS was associated with a 1.24-fold increased odds for major clinical fractures even after adjustment for other clinical factors. A similar result was obtained in the prospective cohort with each SD reduction in HGS being associated with a 1.57-fold increased hazard ratio of fracture even after adjustment for clinical factors. A combination of HGS and femoral neck bone mineral density (FN BMD) T-score values (combined T-score), together with other clinical factors, had a better predictive power of incident fractures than FN BMD or HGS T-score alone with clinical factors. In addition, combined T-score has better sensitivity and specificity in predicting incidence fractures than FN BMD alone. This study is the first study to compare the predictive ability of HGS and BMD. We showed that HGS is an independent risk factor for major clinical fractures. Compared with using FN BMD T-score of -2.5 alone, HGS alone has a comparable predictive power to BMD, and the combined T-score may be useful to identify extra subjects at risk of clinical fractures with improved specificity.