Anemia and decreasing levels of hemoglobin (Hb) have previously been linked to increased fracture risk, but the added value to FRAX, the most utilized fracture prediction tool worldwide, is unknown. To investigate the association between anemia, Hb levels, bone microstructure, and risk of incident fracture and to evaluate whether Hb levels improve fracture risk prediction in addition to FRAX clinical risk factors (CRFs). A total of 2778 community-dwelling women, aged 75-80 years, and part of a prospective population-based cohort study in Sweden were included. At baseline, information on anthropometrics, CRFs, and falls was gathered, blood samples were collected, and skeletal characteristics were investigated using dual-energy x-ray absorptiometry and high-resolution peripheral quantitative computed tomography. At the end of follow-up, incident fractures were retrieved from a regional x-ray archive. The median follow-up time was 6.4 years. Low Hb was associated with worse total hip and femoral neck bone mineral density (BMD), and lower tibia cortical and total volumetric BMD, and anemia was associated with increased risk of major osteoporotic fracture (MOF; hazard ratio 2.04; 95% CI 1.58-2.64). Similar results were obtained for hip fracture and any fracture, also when adjusting for CRFs. The ratio between 10-year fracture probabilities of MOF assessed in models with Hb levels included and not included ranged from 1.2 to 0.7 at the 10th and 90th percentile of Hb, respectively. Anemia and decreasing levels of Hb are associated with lower cortical BMD and incident fracture in older women. Considering Hb levels may improve the clinical evaluation of patients with osteoporosis and the assessment of fracture risk.