Diabetes mellitus and, in particular, type 1 diabetes has been associated with impaired osseous wound healing properties. The scope of the present review is to discuss the clinical evidence supporting a higher rate of complications during fracture healing in diabetic patients and the histological evidence indicating impaired potential for intramembranous and endochondral ossification in the presence of uncontrolled experimental diabetes. The article further provides a synthesis of our current understanding of the plausible molecular mechanisms underlying the diabetic bone healing pathophysiology and of the role of insulin treatment in promoting osseous healing in the diabetic status.