Osteoporosis is a prevalent complication of diabetes, characterized by systemic metabolic impairment of bone mass and microarchitecture, particularly in the spine. Anemarrhenae Rhizoma/Phellodendri Chinensis Cortex (AR/PCC) herb pair has been extensively employed in Traditional Chinese Medicine to manage diabetes; however, its potential to ameliorate diabetic osteoporosis (DOP) has remained obscure. Herein, we explored the protective efficacy of AR/PCC herb pair against DOP using a streptozotocin (STZ)‐induced rat diabetic model. Our data showed that AR/PCC could effectively reduce the elevated fasting blood glucose and reverse the osteoporotic phenotype of diabetic rats, resulting in significant improvements in vertebral trabecular area percentage, trabecular thickness and trabecular number, while reducing trabecular separation. Specifically, AR/PCC herb pair improved impaired osteogenesis, nerve ingrowth and angiogenesis. More importantly, it could mitigate the aberrant activation of osteoblast pyroptosis in the vertebral bodies of diabetic rats by reducing increased expressions of Nlrp3, Asc, Caspase1, Gsdmd and IL‐1β. Mechanistically, AR/PCC activated antioxidant pathway through the upregulation of the antioxidant response protein Nrf2, while concurrently decreasing its negative feedback regulator Keap1. Collectively, our in vivo findings demonstrate that AR/PCC can inhibit osteoblast pyroptosis and alleviate STZ‐induced rat DOP, suggesting its potential as a therapeutic agent for mitigating DOP.