Type 1 diabetes mellitus (T1DM) patients have osteopenia and impaired fracture healing due to decreased osteoblast activity. Further, no adequate treatments are currently available that can restore impaired healing in T1DM; hence a significant need exists to investigate new therapeutics for treatment of orthopedic complications. Sclerostin (SOST), a WNT antagonist, negatively regulates bone formation, and SostAb is a potent bone anabolic agent. To determine whether SOST antibody (SostAb) treatment improves fracture healing in streptozotocin (STZ) induced T1DM mice, we administered SostAb twice weekly for up to 21 days post-fracture, and examined bone quality and callus outcomes at 21 days and 42 days post fracture (11 and 14 weeks of age, respectively). Here we show that SostAb treatment improves bone parameters; these improvements persist after cessation of antibody treatment. Markers of osteoblast differentiation such as RUNX2, collagen I, osteocalcin, and DMP1 were reduced, while an abundant number of SP7/osterix-positive early osteoblasts were observed on the bone surface of STZ calluses. These results suggest that STZ calluses have poor osteogenesis resulting from failure of osteoblasts to fully differentiate and produce mineralized matrix, which produces a less mineralized callus. SostAb treatment enhanced fracture healing in both normal and STZ groups, and in STZ+SostAb mice, also reversed the lower mineralization seen in STZ calluses. Micro-CT analysis of calluses revealed improved bone parameters with SostAb treatment, and the mineralized bone was comparable to Controls. Additionally, we found sclerostin levels to be elevated in STZ mice and β-catenin activity to be reduced. Consistent with its function as a WNT antagonist, SostAb treatment enhanced β-catenin activity, but also increased the levels of SOST in the callus and in circulation. Our results indicate that SostAb treatment rescues the impaired osteogenesis seen in the STZ induced T1DM fracture model by facilitating osteoblast differentiation and mineralization of bone.