Substantial evidence exists that in addition to the well-known complications of diabetes, increased fracture risk is an important morbidity. This risk is probably due, at least in part, to altered bone remodeling and bone cell function in diabetes. Circulating biochemical markers of bone formation, including P1NP, osteocalcin and bone-specific alkaline phosphatase have been found to be decreased in type 2 diabetes (T2D) and may be predictive of fractures independently of bone mineral density (BMD). These findings have been corroborated by preliminary histomorphometric data. Reductions in the bone resorption marker serum CTx in T2D have also been reported. Serum sclerostin levels have been found to be increased in T2D and appear to be predictive of fracture risk independent of BMD. Other factors such as bone marrow fat saturation, advanced glycation endproduct (AGE) accumulation, and microarchitectural changes might also relate to bone cell function and fracture risk in diabetes.