Accurate assessment of hip fracture risk is very important to prevent hip fracture and to monitor the effect of a treatment. A subject-specific QCT-based finite element model was constructed to assess hip fracture risk at the critical locations of femur during the single-leg stance and the sideways fall. The aim of this study was to improve the prediction of hip fracture risk by introducing a more proper failure criterion to more accurately describe bone failure mechanism. Hip fracture risk index was defined using the strain energy criterion, which is able to integrally consider information such as stresses, strains and material properties in bone failure. It was found that the femoral neck and the intertrochanteric region have higher fracture risk than other part of the femur, probably owing to the larger content of cancellous bone in these regions. The study results also suggested that women are more prone to hip fracture than men. The effects of different parameters such as age, body height, weight, and BMI on hip fracture risk were also investigated in this study. The findings in this study have a good agreement with those clinical observations reported in the literature. The main contributions from this study include: (1) introducing an algorithm for hip fracture risk assessment at the critical locations of femur using the strain energy criterion and QCT-based finite element modeling, (2) theoretically more reasonable definition of hip fracture risk index based on the strain energy criterion, and (3) a semi-automatic finite element analysis and automatic calculation of hip fracture risk index at the critical locations of femur using in-house developed computer codes. The proposed hip fracture risk index based on the strain energy criterion will be a promising tool for more accurate assessment of hip fracture risk. However, experimental validation should be conducted before its clinical applications.