Using a rat fracture model, we investigated the effects of a decrease in serum levels of thyroid hormone on the fracture-repair process. Rats were divided into the following groups: (a) controls, (b) those treated with methimazole for the duration of the experiment, and (c) those treated with methimazole and L-thyroxine, receiving both for the same duration. Three weeks after the initiation of pharmacologic treatment, closed femoral fractures were produced. The formation of cartilage tissue in the fracture callus in all rats was not obviously different on day 7 after fracture. In the rats treated with methimazole, differentiation from proliferating to hypertrophic chondrocytes in the fracture callus was less advanced and vascular invasion was clearly inhibited on day 12. Gene expression of alkaline phosphatase and osteocalcin in the callus was significantly lower in these rats than in the controls on days 10, 12, and 14. The mechanical properties of the fracture callus were also significantly weaker in these animals than in the controls on day 21, resulting in impaired fracture repair. These results demonstrate that hypothyroidism inhibits endochondral ossification, resulting in an impaired fracture-repair process. L-thyroxine replacement in the rats treated with methimazole caused the impaired repair process to revert to normal. These results indicate that thyroid hormone is one of the critical systemic factors for fracture repair.