This study aimed to show that the horizontal relationship between the mandibular canal and the alveolar crest can influence the available bone height (ABH) measurement on panoramic radiographs. 92 mandibular edentulous sites of panoramic computed radiographs and reformatted CT images of 77 patients were used. Selected CT images were categorized into four types according to the relative location of the peak of the alveolar crest to the mandibular canal. One oral and maxillofacial radiologist measured the ABH twice on both imaging modalities with an interval of 7 days and compared the measurement differences according to the type. The absolute average value of the differences in measurement between the values of ABHs on panoramic images and CT images was 0.97 mm. Significant difference was found only between the mean values of ABHs for Type 1 (0.60 mm), where the alveolar crest is located in the buccal side or central area with respect to the mandibular canal, and Type 4 (1.46 mm), where the alveolar crest is in the lingual side to the mandibular canal (p < 0.05). The relative horizontal location of the alveolar crest with respect to the mandibular canal affected the ABH measurement on panoramic radiographs. In particular, ABH is overestimated when there has been resorption of the buccal aspect of the ridge, moving the alveolar crest lingually.