The relation between a novel measure of total skeletal muscle mass (assessed by D₃-creatine dilution [D₃Cr]) and incident fracture is unknown. In 1363 men (mean age 84.2 years), we determined D₃Cr muscle mass;​ Fracture Risk Assessment Tool (FRAX) 10-year probability of hip and major osteoporotic (hip, humerus, vertebral, forearm) fracture;​ and femoral neck bone mineral density (BMD) (by dual-energy X-ray absorptiometry [DXA]). Incident fractures were centrally adjudicated by review of radiology reports over 4.6 years. Correlations adjusted for weight and height were calculated between femoral neck BMD and D₃Cr muscle mass. Across quartiles of D₃Cr muscle mass/weight, proportional hazards models calculated hazard ratios (HRs) for any (n = 180);​ nonspine (n = 153);​ major osteoporotic fracture (n = 85);​ and hip fracture (n = 40) after adjustment for age, femoral neck BMD, recurrent fall history, and FRAX probability. Models were then adjusted to evaluate the mediating influence of physical performance (walking speed, chair stands, and grip strength). D₃Cr muscle mass was weakly correlated with femoral BMD (r = 0.10, p < 0.001). Compared to men in the highest quartile, those in the lowest quartile of D₃Cr muscle mass/weight had an increased risk of any clinical fracture (HR 1.8;​ 95% confidence interval [CI], 1.1–2.8);​ nonspine fracture (HR 1.8;​ 95% CI, 1.1–3.0), major osteoporotic fracture (HR 2.3;​ 95% CI, 1.2–4.6), and hip fracture (HR 5.9;​ 95% CI, 1.6–21.1). Results were attenuated after adjustment for physical performance, but associations remained borderline significant for hip and major osteoporotic fractures (p ≥ 0.05 to 0.10). Low D₃Cr muscle mass/weight is associated with a markedly high risk of hip and potentially other fractures in older men;​ this association is partially mediated by physical performance.