The biomechanical mechanisms underlying sex-specific differences in age-related vertebral fracture rates are ill defined. To gain insight into this issue, we used finite element analysis of clinical computed tomography (CT) scans of the vertebral bodies of L3 and T10 of young and old men and women to assess age- and sex-related differences in the strength of the whole vertebra, the trabecular compartment, and the peripheral compartment (the outer 2 mm of vertebral bone, including the thin cortical shell). We sought to determine whether structural and geometric changes with age differ in men and women, making women more susceptible to vertebral fractures. As expected, we found that vertebral strength decreased with age 2-fold more in women than in men. The strength of the trabecular compartment declined significantly with age for both sexes, whereas the strength of the peripheral compartment decreased with age in women but was largely maintained in men. The proportion of mechanical strength attributable to the peripheral compartment increased with age in both sexes and at both vertebral levels. Taken together, these results indicate that men and women lose vertebral bone differently with age, particularly in the peripheral (cortical) compartment. This differential bone loss explains, in part, a greater decline in bone strength in women and may contribute to the higher incidence of vertebral fractures among women than men.