Diabetes mellitus and osteoporosis both are high prevalence disorders, especially in the elderly population. Pioglitazone, a PPAR-γ agonist associated with bone loss and risk of fracture in type 2 diabetes mellitus patients. In this study, ameliorative effect of berberine against pioglitazone-induced bone loss in diabetic rats and possible mechanisms has been explored. Diabetes was induced in male Wistar albino rats by streptozotocin (65 mg/kg, i.v.) after 15min of nicotinamide (230mg/kg, i.p.) administration. Diabetic rats were treated orally with pioglitazone (10mg/kg) and berberine (100mg/kg) alone and in combination of both for 12 weeks. Femur of each rat was isolated and evaluated for the bone micro-architecture, BMD, histology and mRNA expression of PPAR-γ, AMPK, and bone turnover markers (RANKL, OPG, Runx2, and osteocalcin). Urinary calcium and serum TRAP was also measured. Treatment of pioglitazone and berberine alone and in combination significantly ameliorate abnormal blood glucose, serum insulin, and HbA1c levels in streptozotocin-induced diabetic rats. Pioglitazone treatment significantly increased urinary calcium, serum TRAP, mRNA expression of RANKL, PPAR-γ as well as significantly decreased Runx2, OPG, osteocalcin and AMPK levels in diabetic rats. Pioglitazone administration also shows detrimental effect on femur epiphysis micro-architecture, BMD and histology. Whereas, berberine treatment alone and in combination with pioglitazone remarkably ameliorates the abnormal urinary calcium, mRNA expression of AMPK, bone turnover markers, femur epiphysis micro-architecture, histology and also increases BMD in diabetic rats. In conclusion, berberine shows protective effect against pioglitazone-induced bone loss in diabetic rats possibly through AMPK activation pathway.