Obesity and osteoporosis are common public health problems. Paradoxically, while obesity is associated with higher bone density, type 2 diabetic obese individuals have an increased fracture risk. Although obesity and insulin resistance co-exist, some obese individuals remain insulin-sensitive. We suggest that the apparent paradox relating obesity, bone density and fracture risk in type 2 diabetes may be at least partly influenced by differences in bone strength and quality between insulin-resistant and insulin-sensitive obese individuals. In this review, we focus on the complex interplay between, adiposity, insulin resistance and osteoporotic fracture risk and suggest that this is an important area of study that has implications for individually tailored and targeted treatment to prevent osteoporotic fracture in obese type 2 diabetic individuals.