Recent population-based studies demonstrate an increased fracture risk with monoclonal gammopathy of undetermined significance (MGUS). The etiology of this increased risk remains unclear, however, because areal bone mineral density (aBMD) measurements by dual-energy x-ray absorptiometry cannot assess bone microstructural properties critical to determining bone quality and strength. To better define the skeletal effects of MGUS, we performed aBMD and high-resolution peripheral quantitative computed tomography volumetric bone mineral density (vBMD) measurements in 50 MGUS patients (20 females, 30 males; mean ± SEM age, 70.5 ± 1.4 years) and 100 matched control subjects. Relative to controls, MGUS patients had decreased aBMD at the femoral neck (P = .05) and total femur (P < .05) but no differences at other sites. In contrast, high-resolution peripheral quantitative computed tomography showed markedly diminished cortical thickness (P < .05) and increased endocortical area (P < .01). Average vBMD (P < .01), cortical vBMD (P < .001), and trabecular thickness (P < .01) were all significantly decreased in MGUS patients, suggestive of impaired bone formation. Serum levels of the Wnt pathway inhibitor Dickkopf-related protein 1 (P < .001) and osteoclast-activating factor MIP-1α (P < .05) also were significantly elevated in MGUS patients. Our data provide the first evidence of altered bone microstructure in MGUS and suggest that cytokines elevated in osteolytic myeloma also may be associated with bone loss in MGUS.