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Genetic association signals for fractures have been reported at the\n                    <jats:italic>RSPO3<\/jats:italic>\n                    locus, but the causal gene and the underlying mechanism are unknown. Here we show that the fracture reducing allele at the\n                    <jats:italic>RSPO3<\/jats:italic>\n                    locus associate with increased RSPO3 expression both at the mRNA and protein levels, increased trabecular bone mineral density and reduced risk mainly of distal forearm fractures in humans. We also demonstrate that RSPO3 is expressed in osteoprogenitor cells and osteoblasts and that osteoblast-derived RSPO3 is the principal source of RSPO3 in bone and an important regulator of vertebral trabecular bone mass and bone strength in adult mice. Mechanistic studies revealed that RSPO3 in a cell-autonomous manner increases osteoblast proliferation and differentiation. 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