Bone disease is a serious complication to diabetes. Patients with type 1 diabetes (T1D) and type 2 diabetes (T2D) suffer from an increased risk of fracture, most notably at the hip, compared with patients without diabetes. Confounders such as patient sex, age, body mass index, blood glucose status, fall risk, and diabetes medications may influence the fracture risk. Different underlying mechanisms contribute to bone disease in patients with diabetes. Bone quality is affected by low bone turnover in T1D and T2D, and furthermore, incorporation of advanced glycation end-products, changes in the incretin hormone response, and microvascular complications contribute to impaired bone quality and increased fracture risk. Diagnosis of bone disease in patients with diabetes is a challenge as current methods for fracture prediction such as bone mineral density T-score and fracture risk assessment tools underestimate fracture risk for patients with T1D and T2D. This review focuses on bone disease and fracture risk in patients with diabetes regarding epidemiology, underlying disease mechanisms, and diagnostic methods, and we also provide considerations regarding the management of diabetes patients with bone disease in terms of an intervention threshold and different treatments.