Hip fracture incidence is lower in Japan than in the West. Although differences have been found in peak bone mass and hip geometry between white and Japanese populations, these do not fully explain the difference in hip fracture rates. Variation in the rates of involutional bone loss may be an additional contributing factor. We address this issue in a prospective epidemiological study comparing bone loss rate among elderly people in Britain and Japan. Two population-based studies of bone loss rate in a British and a Japanese cohort were performed. Annual bone loss rates were obtained for 172 Hertfordshire men and 143 Hertfordshire women of mean age 66 years, and a questionnaire administered to obtain information on known confounding lifestyle factors. Eighty-six Japanese men and 90 Japanese women of mean age 69 years completed a similar study in Taiji, Japan. British men and women were heavier than Japanese men and women. Differences in lifestyle were also evident; the British men were less likely to smoke and the women more likely to consume alcohol than their Japanese counterparts. The British population also spent more time walking outdoors. Statistically significant differences between the two populations were apparent in baseline bone mineral density at lumbar spine (p < 0.05) and trochanter (p < 0.001) in men and women with Japanese subjects having lower values. There were also significant differences in bone density at the femoral neck (p < 0.001) between British and Japanese males. Men gained bone at the lumbar spine over the follow-up period in both populations. Bone loss rates were generally greater in the British female population than in Japanese women: the difference was statistically significant at the femoral neck (p < 0.05) and femoral trochanter (p < 0.001). These differences all remained significant after adjustment for differences in age between the two populations. Japanese subjects appear to have lower peak bone mass, but slower bone loss rates in later life than their European counterparts. These differences in bone loss rate help to explain the relatively low hip fracture rates found in Japan.