A synthetic hormone, thyroxine, is given to people whose thyroid glands produce too little naturally.
But writing in the British Medical Journal, researchers say having too much boosts fracture risk and doses may need to be reduced as people age.
A British expert said there was not enough research into the condition.
It has been estimated that 20% of older people are on long-term treatment for an underactive thyroid (hypothyroidism).
Patients are supposed to be checked regularly to ensure they are on the right dose, but for many it often remains unchanged into old age.
This can lead to people developing the opposite problem, an over-active thyroid - caused by having too much thyroxine - which can increase the risk of fractures, particularly in older women.
In this study, a team from the Women's College Research Institute in Toronto looked at 213,500 people aged 70 and over who had received at least one prescription for levothyroxine - the synthetic version of thyroxine - between 2002 and 2007.'Unexpectedly low'
Participants were grouped into people who were currently on the medication, those who had stopped taking it between 15 and 180 days prior to study and those who had stopped taking it more than 180 days prior.
Just over 10% - 22,236 people - had had at least one fracture during the study period.
Those who were currently taking thyroxine, or who had recently stopped were at a significantly higher risk of experiencing fractures.
Writing in the BMJ, the researchers led by Dr Lorraine Lipscombe, said it suggested medication levels should be more closely monitored "in this vulnerable population".
In the same journal, Professor Graham Leese at Ninewells Hospital in Dundee, said ideal thyroxine doses may vary with age and be "unexpectedly low" in elderly people.
"It is 120 years since the effect of excess thyroid hormone on bone was first described, yet research in this area still lacks funding," he said.
"With the prevalence of treated hypothyroidism increasing, and the annual economic burden of fractures in the United Kingdom currently estimated at £5.1bn ($8.4bn), such research warrants a higher priority."
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