Long-term bisphosphonate use may be associated with several rare adverse events. Such associations are not optimally evaluated in conventional randomized controlled trials due to the requirements of large numbers of patients and long-term follow-up. Alternatively, administrative claims data from various sources such as Medicare have been used. Because claims data are collected for billing and reimbursement purposes, they have limitations, including uncertain diagnostic validity and lack of detailed clinical information. Using such data for pharmacoepidemiologic research requires complex methodologies that may be less familiar to many researchers and clinicians. In this review, we discuss the strengths and limitations of using claims data for osteoporosis drug safety research, summarize recent advancements in methodologies that may be used to address the limitations, and present directions for future research using claims data. © 2011 Springer Science+Business Media, LLC.