Thiazolidinediones (TZDs) are synthetic PPARγ (peroxisome proliferator-activated receptor gamma) agonists and a class of drugs for diabetes mellitus type 2 that can decrease blood sugar efficiently by enhancing insulin sensitivity. However, increased bone fracture risk in diabetic individuals treated with TZDs is one of the reported side effects. Recent studies show that TZDs such as rosiglitazone simultaneously inhibit osteoblast differentiation and activate osteoclast differentiation, leading to bone loss due to decreased bone formation and increased bone resorption. Furthermore, TZDs may activate PPARγ in tissues other than bone, such as the hypothalamus-pituitary-gonad (HPG) axis to indirectly regulate bone mass. This paper will focus on current new developments that implicate potential mechanisms for how PPARγ modulates skeletal homeostasis and how TZDs exert bone-loss side effects.