Type 2 diabetes mellitus (T2DM) can lead to multiple complications. T2DM‐related bone damage has been linked to abnormal bone turnover, but it cannot fully explain the mechanisms of T2DM bone disease. This study attempts to elucidate the underlying mechanisms of poor bone quality in T2DM. Hence, T2DM model was induced by a high‐fat diet combined with a single streptozotocin injection in 7‐week‐old male SD rats. Osteoblasts derived from SD rats were cultured in high glucose to mimic hyperglycemia. Low bone turnover was observed in T2DM bone with elevated levels of advanced glycation end‐products (AGEs) and receptor for AGEs (RAGE). Additionally, higher levels of oxidative stress and inflammatory factors were found in T2DM bone. AGEs content in bone was pairwise correlated with RAGE, hydrogen peroxide, and inflammatory factors. Serum levels of RAGE, oxidative stress, and inflammatory factors were higher in T2DM, while AGEs content tended to be lower. Besides, 35 differentially expressed metabolites were screened in T2DM serum. Osteoblasts exposed to high glucose displayed analogous abnormal changes in these biomarkers. Thus, low bone turnover in T2DM might be partially due to excess oxidative stress and inflammation induced by AGE‐RAGE signaling. Furthermore, these biomarker levels in serum were mostly consistent with bone, demonstrating their possibility for predicting bone quality in T2DM.