Summary: We performed a randomized clinical trial to evaluate the effect of a 12-month physical exercise program on quality of life, balance, and functional mobility in postmenopausal women with osteoporotic vertebral fractures. All three outcomes improved in the intervention group and were better than in the controls. Introduction: Th aim of this study was to evaluate the effectiveness of a structured physical exercise intervention on quality of life, functional mobility, and balance in patients with osteoporotic vertebral fractures and back pain. Methods: Seventy-eight postmenopausal women with vertebral fractures were randomized into an exercise group (n = 40) and a control group (n = 38). The mean age was 69.2 ± 7.7 years. All women had at least one osteoporotic vertebral fracture and suffered from chronic back pain. Patients with a history of vertebral and non-vertebral fracture within the past 6 months were excluded. The 40-min exercise program was conducted twice weekly for 1 year. Participants in the control group were instructed to continue their usual daily activities. Participants were assessed at baseline and at 12 months using the Quality of Life Questionnaire (QUALEFFO-41). Balance was measured with the Balance Master® System NeuroCom® and functional mobility was measured with the “timed up and go” test and “sit-to-stand” test. Results: Total QUALEFFO-41 score after 12 months was significantly better in the exercise group (44.2 ± 7.5) compared to the control group (56.6 ± 9.4), p <0.0001. Quality of life improved in domains: “Pain”, “Physical function: Jobs around the house”, “Physical function: Mobility”, “Social function”, “General health perception” in the exercise group as compared to the control group. After 12 months, balance as assessed by “Tandem Walk and Sway” became significantly better in the exercise group as compared to the control group (p = 0.02). A significant improvement in the “timed up and go” test (p = 0.02) and the “sit-to-stand” test (p = 0.01) was shown in the exercise group compared to the control group. Conclusions: This is the first 12 month-randomized clinical trial of exercise in osteoporotic women with a vertebral fracture that demonstrates improvement of three key outcome measures: quality of life, functional mobility, and balance.