Osteoporosis is a common and debilitating bone disease characterized by low bone mineral density (BMD), a highly heritable and polygenic trait. Genome-wide linkage studies have identified 3p14-p21 as a quantitative trait locus for BMD. The ARHGEF3 gene is situated within this region and was identified as a strong positional candidate. The aim of this study was to evaluate the role of variation in ARHGEF3 on bone density in women. Sequence variation within ARHGEF3 was analyzed with 17 single-nucleotide polymorphisms (SNPs) in a discovery cohort of 769 female sibs. Significant associations were found with family-based association tests between five SNPs and various measures of age-adjusted BMD (p = 0.0007–0.041) with rs7646054 showing maximal association. Analysis of the data with QPDTPHASE suggested that the more common G allele at rs7646054 is associated with decreased age-adjusted BMD. Significant associations were also demonstrated between 3-SNP haplotypes and age-adjusted spine and femoral-neck BMD (p = 0.002 and 0.003, respectively). rs7646054 was then genotyped in a replication cohort, and significant associations with hip and spine BMD were confirmed (p = 0.003–0.038), as well as an association with fracture rate (p = 0.02). Again, the G allele was associated with a decrease in age-adjusted BMD at each site studied. In conclusion, genetic variation in ARHGEF3 plays a role in the determination of bone density in Caucasian women. This data implicates the RhoGTPase-RhoGEF pathway in osteoporosis.