Overt hyperthyroidism is associated with reduced bone density. The extent of restoration of reduced bone density caused by hyperthyroidism in postmenopausal Graves' disease (GD) patients has not fully been investigated. We examined 85 newly diagnosed postmenopausal GD patients, and we measured their serum thyroid hormone levels as well as their bone turnover marker levels and the bone mineral density (BMD) of their lumbar spine (LS), both femoral necks (FN), and left distal radius (DR). We prospectively observed the patients for changes in BMD and bone turnover marker levels during a 24-month period after euthyroidism had been established by ATD treatment. The median age of the subjects was 57 years old (range: 50 to 79). 46 (54.1%) patients had osteoporosis. 42 of the 46 osteoporosis patients had low BMD in the DR. The patients with osteoporosis were significantly older, had a significantly lower BMI, and had significantly higher bone turnover marker levels compared to the normal BMD patients. The best predictor of the BMD in the DR was BMD in the FN (β = 0.40, p < 0.0001). A total of 42 patients were followed up for 24 months after attainment of euthyroidism, and 19 of them were osteoporosis at the first visit. The BMD of the 19 osteoporotic patients had increased by 4.9% in the LS, 11.9% in the FN, and 9.3% in the DR at 24 months. After maintaining a euthyroid state for 24 months by means of ATD treatment, 26% of the osteoporotic patients had recovered from osteoporosis.