Osteoclast activity and the fine balance between bone formation and resorption is affected by inflammatory factors such as cytokines and T lymphocyte activity, mediated by major histocompatibility complex (MHC) molecules, in turn regulated by the MHC class II transactivator (MHC2TA). We investigated the effect of functional polymorphisms in the MHC2TA gene (CIITA), and two additional genes; C-type lectin domain 16A (CLEC16A), in linkage disequilibrium with CIITA and Interferon-γ (IFNG), an inducer of CIITA; on bone density, bone resorption markers, bone loss and fracture risk in 75 year-old women followed for up to 10 years (OPRA n = 1003) and in young adult women (PEAK-25 n = 999). CIITA was associated with BMD at age 75 (lumbar spine p = 0.011; femoral neck (FN) p = 0.049) and age 80 (total body p = 0.015; total hip p = 0.042; FN p = 0.028). Carriers of the CIITA rs3087456(G) allele had 1.8-3.4% higher BMD and displayed increased rate of bone loss between age 75 and 80 (FN p = 0.013; total hip p = 0.030; total body p = 3.8E(-5)). Despite increasing bone loss, the rs3087456(G) allele was protective against incident fracture overall (p = 0.002), osteoporotic fracture and hip fracture. Carriers of CLEC16A and IFNG variant alleles had lower BMD (p<0.05) and ultrasound parameters and a lower risk of incident fracture (CLEC16A, p = 0.011). In 25-year old women, none of the genes were associated with BMD. In conclusion, variation in inflammatory genes CIITA, CLEC-16A and INFG appear to contribute to bone phenotypes in elderly women and suggest a role for low-grade inflammation and MHC class II expression for osteoporosis pathogenesis.