Objective: Our objective is to observe and detect the facture healing, the change of Bone Mineral Density (BMD), and the expressions of Alkaline Phosphatase (ALP), Osteocalcin (OC), Bone Morphogenetic Protein (BMP)-2, Insulin Growth Factor (IGF)-1 and collagen type 1 in local fracture site and serum, and explore the factors that affect the fracture healing in diabetic rats. Methods: 60 male rats aged 3 months were randomly divided into 2 groups. Group A was the experimental group (diabetic rats with fracture) and group B was the control group (non-diabetic rats with fracture). In group A, Streptozotocin (STZ) was used to damage islet B cells. If there was rat dead or establishment failure during the model establishment then more rats were used for model establishment to make sure there were 5 rats available for detection in each group every time. After that the fracture model was established. At 1, 2, 3, 4, 6, and 8 weeks after the model establishment, the BMD values of lumbar vertebra, hip joint, local fracture site and callus were detected; the blood glucose, calcium, phosphorus and ALP in the serum were detected; OC was detected by radioimmunoassay; serum BMP-1 and IGF-1 were detected by Enzyme-Linked Immunosorbent Assay (ELISA); the expressions of BMP-2, IGF-I and OC in callus tissue were detected by immunohistochemistry. Results: Compared with the group B, the blood glucose in the group A was significantly increased after 1, 2, 3, 4, 6, and 8 weeks, which were all higher than 13.8 mmol/l; the BMD values of lumbar vertebra, hip joint, local fracture site and callus were decreased, which was most significant after 4 weeks and the difference from group B was most significant after 8 weeks; the blood calcium and phosphorus were decreased, and the difference from group B was most significant after 6 weeks; blood BMP-2, IGF-I, ALP and OC were significantly decreased, and the peak was delayed for a week; immunohistochemistry results showed that BMP-2, IGF-I and OC were decreased in callus tissue; real-time PCR showed that BMP-2, IGF-1 and collagen type 1 in callus tissue were all significantly decreased in the first 3 weeks, the difference was most significant after 2 weeks, BMP-2 and IGF-1 were not significantly different after 4 weeks, the peaks were delayed for 1 week, collagen type 1 was decreased after 4 and 6 weeks with significant differences, however there was no difference after 8 weeks. Conclusion: The fracture healing is poor in diabetic rats with delayed healing or non-union. The early BMP-2 and IGF-I in blood and local callus tissue were decreased during the fracture healing. During the fracture healing, the number and function of local bone and callus tissue were decreased, and the expression of collagen type 1 was decreased. There was significant loss of calcium and phosphorus. During the fracture healing the BMD of local bone and callus tissue were decreased and there was memorization dysfunction. The decrease of BMP-2 and IGF-1 in serum and local callus tissue can cause the decrease of osteoblast amount and function, decrease collagen type 1, dysfunction of mineralization of callus at late stage, which are the important factors of the poor fracture healing in diabetic rats.