Osteoporosis is a common multifactorial disorder characterized by low bone mass (BMD) and high susceptibility to low-trauma fractures. Family and twin studies have found a strong genetic component in the determination of BMD, but the mode of inheritance of this trait is not yet fully understood. BMD is a complex trait whose expression is confounded by environmental influences and polygenic inheritance. Detection of potential gene-environment interactions is of great interest in the determination of bone health status. Here we have conducted segregation analyses, using the regressive class D models, in a sample of 100 European pedigrees (NEMO) with 713 subjects (524 measured for phenotypes) identified via a male with low BMD values at either the Lumbar Spine or the Femoral Neck. Segregation analyses were conducted on the residuals of LS-BMD and FN-BMD adjusted for gender, age and BMI. We tested for gene-covariate (GxE) interactions, and investigated the impact of significant GxE interactions on segregation results. Without GxE a major effect was found to be marginally significant in LS-BMD and highly significant in FN-BMD. For both traits the Mendelian hypothesis was rejected. Significant Age x gene and BMI x gene interactions were revealed. Accounting for GxE increased statistical evidence for a major factor in LS-BMD, and improved the fit of the data to the Mendelian transmission model for both traits. The best fitting models suggested a codominant major gene accounting for 45% (LS-BMD) and 44% (FN-BMD) of the adjusted BMDs. However, substantial residual correlations were also found, and these remained highly significant after accounting for the major gene.