Diabetes mellitus and estrogen deficit are known causes of osteopenia in animal models as well as in humans. In the present work, the combined effect of ovariectomy and diabetes was investigated. Diabetes was induced in ovary-intact and ovariectomized female Wistar rats with a single injection (50 mg/kg body weight, i.p.) of streptozotocin. The rats were administered insulin (I) daily or 17-beta estradiol (E2) on alternate days for a period of 35 days and sacrificed. Serum calcium (Ca2+), phosphorus (P), alkaline phosphatase (ALP), tartrate-resistant acid phosphatase (TRAP), vertebral ALP, collagen, and glycosaminoglycans were estimated. The levels of serum Ca2+ and P increased in diabetic rats, but decreased after I or E2 treatments. Serum ALP and TRAP activity increased in the ovary-intact and ovariectomized diabetic rats. Vertebral ALP activity increased in ovariectomized diabetic rats, but decreased in diabetic rats, which were treated with I or E2. In the vertebrae, TRAP activity was elevated as a result of diabetes, but this was prevented by insulin or estradiol. Diabetes induced a decrease in total collagen in the vertebrae, while I or E2 treatment induced an increase. The levels of chondroitin sulphate and heparan sulphate decreased significantly in the vertebrae of both ovary-intact and ovariectomized diabetic rats, while hyaluronic acid increased. In conclusion, diabetes and ovariectomy each seem to affect the process of matrix formation and mineralization in the bone, and this is aggravated by the combination of diabetes and ovariectomy. The effects of I and E2 were similar, and both hormones reversed the changes brought about by diabetes.