Age-related bone loss is a major health concern. Traditionally, only exercises associated with high-impact and mechanical loading have been linked to a positive effect on bone; however, these types of exercise may not always be appropriate for middle-aged and older adults due to physical decline. Water-based exercise (WBE) has been shown to affect different components of physical fitness and has lower risks of traumatic fracture and less stress to the joints. However, the effects of WBE on bone health are unclear. This systematic review aims to explore whether WBE is effective in preventing age-related bone deterioration in middle-aged and older adults. Relevant databases were searched in October 2015. Eleven studies, comprising 629 participants, met the inclusion criteria. All participants were postmenopausal women, with no studies investigating the effects of WBE in a male population found. Methodology varied considerably between studies, notably the frequency, intensity and the duration of the intervention. Eight studies compared WBE to a sedentary control group (CG), and four had a land exercise (LE) as comparison group, such as resistance or strength training. Four studies reported a significant effect of WBE. Meta-analyses revealed significant differences between WBE and CG in favour of WBE for changes in bone mineral density (BMD) at the lumbar spine (LS) (MD 0.03; 95% CI 0.01 to 0.05), and femoral neck (FN) (MD 0.04; 95% CI 0.02 to 0.07). Significant differences were also revealed between WBE and LE in favour of LE for changes in LS BMD (MD -0.04; 95% CI -0.06 to -0.02). However, there was no significant difference between these two groups for changes in BMD at FN (MD -0.03; 95% CI 0.08 to 0.01). The results indicate that WBE may have benefits with respect to maintaining or improving bone health in postmenopausal women. Further well-designed research is required on this topic.