Objective: The study was conducted to evaluate the relation between insulin-like growth factor-1 and osteocalcin and markers of bone modulation (osteoprotegerin; OPG, receptor activator nuclear kappa B; RANK and RANK ligand; RANKL) in postmenopausal Type 2 diabetic women with and without osteoporosis. Methods: The study was conducted on 90 female divided into three groups (30 each). Group I included healthy postmenopausal women as a control, Group II included diabetic postmenopausal women without osteoporosis Group III included diabetic postmenopausal women with osteoporosis. Fasting blood samples were obtained for the determination of blood glucose, HbA1c, total and ionized calcium, OPG, RANK and RANKL. Also the levels of IGF-1 and osteocalcin were assessed. Results: In postmenopausal Type 2 diabetic women, the osteoporosis resulted in derangement in OPG/sRANKL system. The serum level of OPG was elevated while sRANKL declines in osteoporotic postmenopausal Type 2 diabetic women. IGF-1 level decreased in diabetic postmenopausal women but those women with osteoporosis showed a great decline by about 60%. IGF-1 level in osteoporotic diabetic postmenopausal women was correlated with BMD and most bone turnover markers (OPG, sRANKL, OPG/sRANKL). Osteocalcin declined significantly only in those women with osteoporosis not without osteoporosis. Conclusions: The circulating levels of OPG and sRANKL were not useful markers for bone status in postmenopausal women while the circulating levels of IGF-1 and osteocalcin might give useful information about bone status in postmenopausal diabetic women.