Histological and molecular analysis of fracture healing in normal and diabetic animals showed significantly enhanced removal of cartilage in diabetic animals. Increased cartilage turnover was associated with elevated osteoclast numbers, a higher expression of genes that promote osteoclastogenesis, and diminished primary bone formation.Introduction: Diminished bone formation, an increased incidence of nonunions, and delayed fracture healing have been observed in animal models and in patients with diabetes. Fracture healing is characterized by the formation of a stabilizing callus in which cartilage is formed and then resorbed and replaced by bone. To gain insight into how diabetes affects fracture healing, studies were carried out focusing on the impact of diabetes on the transition from cartilage to bone. Materials and Methods: A low-dose treatment protocol of streptozotocin in CD-1 mice was used to induce a type 1 diabetic condition. After mice were hyperglycemic for 3 weeks, controlled closed simple transverse fractures of the tibia were induced and fixed by intramedullary pins. Histomorphometric analysis of the tibias obtained 12, 16, and 22 days after fracture was performed across the fracture callus at 0.5 mm proximal and distal increments using computer-assisted image analysis. Another group of 16-day samples were examined by CT. RNA was isolated from a separate set of animals, and the expression of genes that reflect the formation and removal of cartilage and bone was measured by real-time PCR. Results: Molecular analysis of collagen types II and X mRNA expression showed that cartilage formation was the same during the initial period of callus formation. Histomorphometric analysis of day 12 fracture calluses showed that callus size and cartilage area were also similar in normoglycemic and diabetic mice. In contrast, on day 16, callus size, cartilage tissue, and new bone area were 2.0-, 4.4-, and 1.5-fold larger, respectively, in the normoglycemic compared with the diabetic group (p < 0.05). Analysis of CT images indicated that the bone volume in the normoglycemic animals was 38% larger than in diabetic animals. There were 78% more osteoclasts in the diabetic group compared with the normoglycemic group (p < 0.05) on day 16, consistent with the reduction in cartilage. Real-time PCR showed significantly elevated levels of mRNA expression for TNF-␣, macrophage-colony stimulating factor, RANKL, and vascular endothelial growth factor-A in the diabetic group. Similarly, the mRNA encoding ADAMTS 4 and 5, major aggrecanases that degrade cartilage, was also elevated in diabetic animals. Conclusions: These results suggest that impaired fracture healing in diabetes is characterized by increased rates of cartilage resorption. This premature loss of cartilage leads to a reduction in callus size and contributes to decreased bone formation and mechanical strength frequently reported in diabetic fracture healing.