A closed fracture was performed on the left tibia of 3-month-old Wistar rats weighing 250 to 350 g that were either healthy (N = 24) or made diabetic with alloxan (N = 24) to investigate the effect of alloxan-induced diabetes on the course of bone fracture healing. Histomorphometric analysis of the fracture site was performed at 7, 14, 25, and 35 days. After 7 days, diabetic rats had significantly less cartilage (P = 0.045) and greater fibrous connective (P = 0.006) tissue formation at the fracture site compared to controls. In contrast, marked callus formation was seen in diabetic rats with significant osteogenesis (P = 0.011, P = 0.010, P = 0.010, respectively, for 14, 25, and 35 days) and chondrogenesis (P = 0.028, P = 0.033, P = 0.019) compared to controls. Radiographic analysis revealed a displaced fracture with poor bone fragment alignment and delayed consolidation at these times in the diabetic group. The levels of alkaline phosphatase were significantly higher in diabetic rats at 25 days (P = 0.009). These results suggest that the initial excessive formation of fibrous connective tissue associated with delay in chondrogenesis and osteogenesis may not provide suitable stability of the fractured site, contributing to the inappropriate alignment of fragments and an increase in the volume of callus in later stages of repair. The resulting displaced fracture in diabetic rats requires long periods for remodeling and complete bone consolidation.