Osteoporosis is a crippling affliction in which bone mass decreases, making it more susceptible to fracture. In postmenopausal women it presents most often as a hip, spinal, or forearm fracture. Adult women face a 15% lifetime risk of a hip fracture, and the annual costs of hip fractures alone are estimated at $7.3 billion in the United States. Since the 1970s, estrogen/progestogen therapy has been recognized as an effective intervention that reduces the risk of fractures. Recently, the development of methods for accurately determining bone mass and thus helping to predict bone fracture risk has made this intervention attractive for use in a targeted population. This report analyzes the health care costs and calculates the cost savings of coupling bone mineral density screening at the time of menopause with long-term estrogen/progestogen therapy for those most at risk for developing fractures. The model assumes that a cohort of 100000 American white women, aged 50, are screened for bone mineral density and that 90% of the high-risk group (density <0.85 g/cm3) and 70% of the mid-risk group (density between 0.85 and 1.00 g/cm3) elect to take hormone replacement therapy for 15 years. Based on calculations of the costs of screening and hormone replacement therapy, and the savings in cost of treatment and lost productivity from reduced fractures, it is estimated that the present value of savings in cost of illness for this cohort over a 40-year period is $5.1 million. In present value terms, total net savings of $27.6 million attributable to screening and hormonal therapy are projected, over a 40-year period, assuming that 50% of the 1.09 million American white women who reached age 50 in 1988 are screened as described for the cohort. Similar, if not greater, savings could be expected for populations reaching age 50 in subsequent years.