During the menopause transition (MT), lean mass decreases and fat mass increases. We examined the associations of these body composition changes during the MT (2 years before to 2 years after the final menstrual period) with bone mineral density (BMD) at the end of the MT and fracture after the MT. We included 539 participants from the Study of Women's Health Across the Nation who were not taking bone-beneficial or bone-detrimental medications before or during the MT. Using multivariable linear regression, we assessed the independent associations of % lean mass loss and % fat mass gain during the MT (mutually adjusted) with femoral neck (FN) and lumbar spine (LS) BMD at the end of the MT, adjusted for pre-MT BMD, pre-MT lean and fat mass, race/ethnicity, Study of Women's Health Across the Nation (SWAN) study site, age, and cigarette use. We used Cox proportional hazards regression to quantify the relations of % lean loss and % fat gain during the MT with fracture after the MT. The Cox model was adjusted for the covariates above plus post-MT use of bone-detrimental medications, and censored at the first use of bone-beneficial medications;​ we further controlled for FN or LS BMD at the end of the MT. Adjusted for covariates, each standard deviation (SD) (6.9%) increment in lean mass loss was associated with 0.010 g/cm² lower FN BMD (p < 0.0001);​ each SD (19.9%) increment in fat mass gain was related to 0.026 g/cm² greater FN (p = 0.009) and LS (p = 0.03) BMD. Each SD increment in lean mass loss and fat mass gain was associated with 63% (p = 0.001) and 28% (p = 0.05) greater fracture hazard after the MT;​ associations were essentially unchanged by BMD adjustment. MT-related lean mass loss and fat mass gain were associated differentially with BMD;​ both were independently related to more fractures. Mitigating MT-related body composition changes may reduce fracture risk.