The fate of osteoprogenitor cells along with the progression of type 2 diabetes (T2DM) and factors determining the fate of those cells remains to be elucidated. This cross-sectional study included 18 normoglycemic, 27 prediabetic, and 73 T2DM to determine osteogenic differentiation across the continuum of dysglycemia and to construct a model to predict the fate of osteoprogenitor cells. This study demonstrated a preserved osteogenic differentiation ability of peripheral blood-derived mononuclear cells (PBMC) isolated from normoglycemic and prediabetic but a progressive decline in their osteogenic differentiation during the progression of T2DM. The rate of osteogenic differentiation rapidly declined by 4–7% annually during the first 10 years of diabetes and then slowed down. A predictive model composed of three independent risk factors, including age, duration of diabetes, and glomerular filtration rate, demonstrated an AuROC of 0.834. With a proposed cut-off of 21.25, this model had 72.0% sensitivity, 87.5% specificity, and 78.9% accuracy in predicting the fate of osteoprogenitor cells. In conclusion, this study provided a perspective on the osteogenic differentiation ability of the osteoprogenitor cells across a continuum of dysglycemia and a predictive model with good diagnostic performance for the prediction of the fate of osteoprogenitor cells in patients with T2DM.