This paper applies audit study technique to age discrimination in Japanese rental housing market. Using data from the 2001 Osaka Audits, this paper analyzes the level and causes of the discrimination, and argues the relation between age discrimination and residential segregation of elderly. The estimated level of discrimination is high: The number of available housing units about which elderly home-seekers are told is 30 percent fewer. Econometric tests suggest that stereotyping about elderly renters' ability to pay and rental terms, and young people's preference for a neighborhood of young inhabitants influences agent behavior. And age discrimination and inflexibility in the housing market for the elderly are probable reason for residential segregation of elderly.