Bone and muscle are closely linked mechanically and biochemically. Bone hormones secreted during bone remodeling might be linked to muscle mass and strength maintenance. Exercise elicits high mechanical strain and is essential for bone health. However, the relationship between commonly used bone turnover markers (BTMs) and muscle function in community dwelling older adults remains unclear. It is also unknown how acute exercise with differing mechanical strain may affect BTMs, and whether baseline muscle function alters BTM responses differently. We tested the hypothesis that BTMs are associated with muscle function, and that acute exercise could change the circulating levels of BTMs. Thirty-five older adults (25 females/10 males, 72.8 ± 6.0 years) participated. Baseline assessments included body composition (DXA), handgrip strength and a physical performance test (PPT) (gait speed, timed-up-and-go [TUG], stair ascent/descent). Leg muscle quality (LMQ) and stair climb power (SCP) were calculated. Participants performed (randomized) 30 min aerobic (AE) (cycling 70%HR_Peak) and resistance (RE) (leg press 70%RM, jumping) exercise. Serum β-isomerized C-terminal telopeptides (β-CTX), procollagen of type I propeptide (P1NP), total osteocalcin (t)OC and ucOC were assessed at baseline and post-exercise. Data were analyzed using linear mixed models and simple regressions, adjusted for sex. At baseline, higher muscle strength (LMQ, handgrip) was related to higher P1NP, higher SCP was related to higher P1NP and β-CTX, and better physical performance (lower PPT) related to higher P1NP and β-CTX (p < 0.05). Exercise, regardless of mode, decreased β-CTX and tOC (all p < 0.05), while P1NP and ucOC remained unaltered. Higher baseline handgrip strength, SCP and LMQ was associated with lower post-exercise β-CTX responses, and poorer baseline mobility (increased TUG time) was associated with higher post-exercise β-CTX. Independently of exercise mode, acute exercise decreased β-CTX and tOC. Our data suggest that in older adults at baseline, increased BTM levels were linked to better muscle function. Altogether, our data strengthens the evidence for bone-muscle interaction, however, mechanisms behind this specific component of bone-muscle crostalk remain unclear.