The aim of this study is to investigate the impact of bisphosphonate treatment on the prognosis of patients with initial hip fracture. Patients aged fifty years and older with initial hip fracture were identified from the Taiwan National Health Insurance Research Database between 2002 and 2011. A multi-state model was established to evaluate the transition between “first to second hip fracture”, “first hip fracture to death”, and “second hip fracture to death”. Transition probability and cumulative hazards were used to compare the prognosis of initial hip fracture in a bisphosphonate treated cohort versus non-treated cohort. In addition, Deyo-Charlson comorbidities, both vertebral and non-vertebral fractures, and cataracts were also included for analysis. After 10-year follow-up, there is decreased cumulative transition probability for both second hip fracture and mortality after both first and second hip fracture in the bisphosphonate treated cohort. Multivariable, transition-specific time-dependent Cox model revealed that bisphosphonate treatment significantly reduced risk for second hip fracture in the first 5 years of the treatment (HR 0.88;​ 95% CI 0.79–0.99;​ P:​ 0.034), first hip fracture mortality (HR 0.88;​ 95% CI 0.83–0.93;​ P < 0.001), and second hip fracture mortality in the first 2 years of the treatment (HR 0.78;​ 95% CI 0.65–0.95;​ P = 0.011). Female sex, both vertebral and non-vertebral fractures, cataracts, dementia in the first 2 years, and DM with complication were all significantly associated with risk of a second hip fracture. Cerebrovascular disease and hemiplegia comorbidities had less risk of a second hip fracture. The risk of mortality after both first and second hip fracture was significantly associated with congestive heart failure, renal disease, myocardial infarction, and moderate to severe liver disease. Our study demonstrated that bisphosphonate treatment and strict management of comorbidities after the initial hip fracture significantly decrease the risk for a second hip fracture and mortality.