Diabetes mellitus (DM) and osteoporotic fractures are two of the most important causes of mortality and morbidity in older subjects. Recent data report a close association between fragility fracture risk and DM of both type 1 (DM1) and type 2 (DM2). However, DM1 is associated with reduced bone mineral density (BMD), whereas patients with DM2 generally have normal or increased BMD. This apparent paradox may be explained by the fact that, at a given level of BMD, diabetic patients present lower bone quality with respect to non-diabetics, as shown by several studies reporting that diabetes may affect bone tissue by means of various mechanisms, including hyperinsulinemia, deposition of advanced glycosylation endproducts (AGEs) in collagen, reduced serum levels of IGF-1, hypercalciuria, renal failure, microangiopathy and inflammation. In addition, the propensity to fall and several comorbidities may further explain the higher fracture incidence in DM patients with respect to the general population. It is reasonable to expect that close metabolic control of diabetes may improve bone status, although its effect on reduction of fracture risk has not yet been demonstrated. However, metformin has a direct effect on bone tissue by reducing AGE accumulation, whereas insulin acts directly on osteoclast activity, and thiazolidinediones (TZD) may have a negative effect by switching mesenchymal progenitor cells to adipose rather than bone tissue. New prospects include the incretins, a class of antidiabetic drugs which may play a role linking nutrition and bone metabolism. Better knowledge on how diabetes and its treatments influence bone tissue may lie at the basis of effective prevention of bone fracture in diabetic patients. Thus, close glycemic control, adequate intake of calcium and vitamin D, screening for low BMD, and prevention and treatment of diabetic complications are key elements in the management of osteoporosis in both DM1 and DM2. Attention should be paid to treating diabetes with TZD in women with DM2, particularly if elderly. Lastly, patients with osteoporosis and diabetes should be offered the same pharmacological treatments as non-diabetics, although specific trials on the effects of anti-osteoporotic drugs in the diabetic population are lacking.