Objective Secondary osteoporosis is very common in patients with primary osteoporosis. Diabetes is a known cause of secondary osteoporosis. While type I diabetes has been clearly linked with diabetic osteoporosis, the effect of type II diabetes on bone health is controversial.Methods In the present study, we investigated the associations between type II diabetes and osteoporosis as well as fractures at different skeletal sites in Women’s Health Initiative participants.Results Common risk factors such as age, race, BMI, HRT use, and the history of fractures were significantly associated with osteoporosis and fractures in this study population. Diabetic women appeared to have a decreased risk of osteoporosis although it no longer remained significant after adjusting for other risk factors (crude HR=0.78, 95%CI 0.61 to 0.99; adjusted HR=0.93, 95%CI 0.73 to 1.19). The impact of diabetes on fractures varied at different body sites. There was a significant increase of risk of hip fracture (HR=2.54, 95%CI 1.14 to 5.66), but not spine fracture (HR=1.71, 95%CI 0.81 to 3.60) and arm fracture (HR=0.92, 95%CI 0.48 to 1.76) among the women with diabetes. Although the overall risk of fractures in diabetic women did not differ significantly from non-diabetic women (HR=1.37, 95%CI 0.89 to 2.09), the difference had a two-fold increase and was statistically significant after 2,000 days (HR=2.01, 95%CI 1.21 to 3.35), indicating a different hazard at different stages of diabetes.Conclusion Our findings suggest that type II diabetes may not be clearly associated with osteoporosis, it increases a site-specific fracture risk at least in the hip. In addition, the overall fracture risk appears to increase in a time-dependent manner.