The prevalence of diabetes mellitus especially type 2 diabetes mellitus is increasing all over the world. In addition to cardiomyopathy and nephropathy, diabetics are at higher risk of mortality and morbidity due to greater risk of bone fractures and skeletal abnormalities. Patients with diabetes mellitus have lower bone quality in comparison to their non-diabetic counterparts mainly because of hyperglycemia, toxic effects of advanced glycosylation end-products (AGEs) on bone tissue, and impaired bone microvascular system. AGEs may also contribute to the development of osteoarthritis further to osteoporosis. Therefore, glycemic control in diabetic patients is vital for bone health. Metformin, a widely used antidiabetic drug, has been shown to improve bone quality and decrease the risk of fractures in patients with diabetes in addition to glycemic control and improving insulin sensitivity. AMP activated protein kinase (AMPK), the key molecule in metformin antidiabetic mechanism of action, is also effective in signaling pathways involved in bone physiology. This review, discusses the molecules linking diabetes and bone turnover, role of AMPK in bone metabolism, and the effect of metformin as an activator of AMPK on bone disorders and malignancies.