The WNT16 locus is a major determinant of cortical bone thickness and nonvertebral fracture risk in humans. The disability, mortality and costs caused by osteoporosis-induced nonvertebral fractures are enormous. We demonstrate here that Wnt16-deficient mice develop spontaneous fractures as a result of low cortical thickness and high cortical porosity. In contrast, trabecular bone volume is not altered in these mice. Mechanistic studies revealed that WNT16 is osteoblast derived and inhibits human and mouse osteoclastogenesis both directly by acting on osteoclast progenitors and indirectly by increasing expression of osteoprotegerin (Opg) in osteoblasts. The signaling pathway activated by WNT16 in osteoclast progenitors is noncanonical, whereas the pathway activated in osteoblasts is both canonical and noncanonical. Conditional Wnt16 inactivation revealed that osteoblast-lineage cells are the principal source of WNT16, and its targeted deletion in osteoblasts increases fracture susceptibility. Thus, osteoblast-derived WNT16 is a previously unreported key regulator of osteoclastogenesis and fracture susceptibility. These findings open new avenues for the specific prevention or treatment of nonvertebral fractures, a substantial unmet medical need.