Diabetes mellitus (particularly type 2) and osteoporosis are two very common disorders, and both are increasing in prevalence. Adolescents with type 1 diabetes mellitus may not reach potential peak bone mass, putting them at greater fracture risk. In adults with type 2 diabetes, fracture risk is increased and is not explained by the bone mineral density measured by dual-energy X-ray absorptiometry, still considered the gold standard predictor of fracture. In this review, we explore potential mechanisms behind the increased fracture risk that occurs in patients with diabetes, even those with increased bone mineral density. One potential link between diabetes and bone is the osteoblast-produced factor, osteocalcin. It remains to be established whether osteocalcin reflects or affects the connection between bone and glucose metabolism. Several other potential mediators of the effects of diabetes on bone are discussed.