Osteopenia, caused by estrogen deficiency in postmenopausal women (PMW), lowers Bone Mineral Density (BMD) and increases bone fragility. It affects about half of older women's social and physical health. PMW experience pain and disability, impacting their health-related Quality of Life (QoL) and function. This study aimed to determine the effects of Kinect-based Virtual Reality Training (VRT) on physical performance and QoL in PMW with osteopenia. The study was a prospective, two-arm, parallel-design, randomized controlled trial. Fifty-two participants were recruited in the trial, with 26 randomly assigned to each group. The experimental group received Kinect-based VRT thrice a week for 24 weeks, each lasting 45 min. Both groups were directed to participate in a 30-min walk outside every day. Physical performance was measured by the Time Up and Go Test (TUG), Functional Reach Test (FRT), Five Times Sit to Stand Test (FTSST), Modified Sit and Reach Test (MSRT), Dynamic Hand Grip Strength (DHGS), Non-Dynamic Hand Grip Strength (NDHGS), BORG Score and Dyspnea Index. Escala de Calidad de vida Osteoporosis (ECOS-16) questionnaire measured QoL. Both physical performance and QoL measures were assessed at baseline, after 12 weeks, and after 24 weeks. Data were analyzed on SPSS 25. The mean age of the PMW participants was 58.00 ± 5.52 years. In within-group comparison, all outcome variables (TUG, FRT, FTSST, MSRT, DHGS, NDHGS, BORG Score, Dyspnea, and ECOS-16) showed significant improvements (p < 0.001) from baseline at both the 12th and 24th weeks and between baseline and the 24th week in the experimental group. In the control group, all outcome variables except FRT (12th week to 24th week) showed statistically significant improvements (p < 0.001) from baseline at both the 12th and 24th weeks and between baseline and the 24th week. In between-group comparison, the experimental group demonstrated more significant improvements in most outcome variables at all points than the control group (p < 0.001), indicating the positive additional effects of Kinect-based VRT. The study concludes that physical performance and QoL measures were improved in both the experimental and control groups. However, in the group comparison, these variables showed better results in the experimental group. Thus, Kinect-based VRT is an alternative and feasible intervention to improve physical performance and QoL in PMW with osteopenia. This novel approach may be widely applicable in upcoming studies, considering the increasing interest in virtual reality-based therapy for rehabilitation.