Purpose Fractures in patients with type 2 diabetes mellitus are at a high risk of delayed union or non-union. Previous studies have shown a protective effect of liraglutide on bone. In the present study, we aimed to investigate the effects of a combination of liraglutide and insulin on fracture healing in a rat model of diabetes and the mechanisms involved. Materials and Methods Closed femoral mid-shaft fractures were established in male Sprague-Dawley rats with or without diabetes mellitus, and the diabetic rats were administered insulin and/or liraglutide. Six weeks after femoral fracture, the femoral callus was evaluated by immunohistochemistry, histology, and micro-computed tomography. Additionally, the effects of liraglutide on high-glucose-stimulated MC3T3-E1 cells were analyzed by Western blotting. Results Micro-computed tomography and safranin O/fast green staining showed that fracture healing was delayed in the diabetic rats, and this was accompanied by much lower expression of osteogenic markers and greater osteoclast activity. However, treatment with insulin and/or liraglutide prevented these changes. Liraglutide in combination with insulin treatment resulted in lower blood glucose concentrations and significantly higher osteocalcin (OCN) and collagen I (Col I) expression six weeks following fracture. Western blot analysis showed that liraglutide prevented the low expression of the bone morphogenetic protein-2, osterix/SP7, OCN, Col I, and β-catenin in high-glucose-stimulated MC3T3-E1 cells. Conclusion These results demonstrate that insulin and/or liraglutide promotes bone fracture healing in the DF model. The combination was more effective than either single treatment, which may be because of the two drugs’ additive effects on the osteogenic ability of osteoblast precursors.