Osteoporosis and type 2 diabetes mellitus (T2DM) are now prevalent in aging and westernized societies, and adversely affect the health of the elderly people by causing fractures and vascular complications, respectively. Recent experimental and clinical studies show that both disorders are etiologically related to each other through the actions of osteocalcin and adiponectin. Meta-analyses of multiple clinical studies show that hip fracture risk of T2DM patients is increased to 1.4 to 1.7-folds, although BMD of the patients is not diminished. Vertebral fracture risk of T2DM patients is also increased, and BMD is not useful for assessing its risk. These findings suggest that bone fragility in T2DM depends on bone quality deterioration rather than bone mass reduction. Thus, surrogate markers are needed to replace the insensitivity of BMD in assessing fracture risks of T2DM patients. Markers related to advanced glycation end products as well as insulin-like growth factor-I may be such candidates, because these substances were experimentally shown to modulate bone quality in DM. In practice, it is important for physicians to assess fracture risk in T2DM patients by evaluating prior VFs and fracture histories using spine X-ray and interview, respectively, until the usefulness of surrogate markers is established.