The current diagnosis of osteoporosis is limited to a T‐score ≤–2.5. However, asymptomatic vertebral fractures (VF) are known to predict a high risk of subsequent fractures and pharmaceutical intervention is known to reduce future fracture risk in these individuals. In a prospective, population‐based cohort of ambulant older women, we sought to evaluate the role of VF detection by screening densitometric lateral spine imaging (LSI) for VF at time of bone density testing to the effect on the magnitude of fracture risk. A total of 1084 women (mean age 75 years ± SD 3 years) had baseline LSI that identified 100 (9%) women with VFs and 89 (8%) with femoral neck (FN) T‐score osteoporosis ≤–2.5. Follow‐up identified incident clinical spine fracture in 73 (7%), 305 (28%) with any fracture‐related hospitalization, and 121 (11%) with a hip fracture–related hospitalization. Compared with those without baseline VF, in those with baseline VF, relative risk (RR) for incident clinical spine, hip, and any fracture were 3.46 (95% confidence interval [CI] 2.14–5.60, p < 0.001); 1.72 (95% CI 1.09–2.71, p = 0.02), and 1.4 (95% CI 1.07–1.84, p = 0.02), respectively. In 675 (62%) of women with femoral neck osteopenia (T‐score <–1 to >–2.5), 61 (9%) also had a VF. Compared with those without baseline VF, RR for any incident fragility fractures and fractures at spine and hip in those with baseline VF were 1.6 (95% CI 1.2–2.1, p < 0.01), 3.9 (95% CI 2.2–6.9, p < 0.01), and 1.6 (95% CI 0.9–2.8, p = 0.10), respectively. On basis of the prognosis, older women with LSI VF with osteopenia should be diagnosed with osteoporosis and should be considered for pharmaceutical intervention. © 2018 American Society for Bone and Mineral Research.