Older adults with type 2 diabetes (T2D) tend to have normal or greater areal bone mineral density (aBMD), as measured by DXA, than those who do not have diabetes (non-T2D). Yet risk of fracture is higher in T2D, including 40% to 50% increased hip fracture risk. We used HR-pQCT to investigate structural mechanisms underlying skeletal fragility in T2D. We compared cortical and trabecular bone microarchitecture, density, bone area, and strength in T2D and non-T2D. In secondary analyses we evaluated whether associations between T2D and bone measures differed according to prior fracture, sex, and obesity. Participants included 1069 members of the Framingham Study, who attended examinations in 2005 to 2008 and underwent HR-pQCT scanning in 2012 to 2015. Mean age was 64 ± 8 years (range, 40 to 87 years), and 12% (n = 129) had T2D. After adjustment for age, sex, weight, and height, T2D had lower cortical volumetric BMD (vBMD) (p < 0.01), higher cortical porosity (p = 0.02), and smaller cross-sectional area (p = 0.04) at the tibia, but not radius. Trabecular indices were similar or more favorable in T2D than non-T2D. Associations between T2D and bone measures did not differ according to sex or obesity status (all interaction p > 0.05);​ however, associations did differ in those with a prior fracture and those with no history of fracture. Specifically, cortical vBMD at the tibia and cortical thickness at the radius were lower in T2D than non-T2D, but only among those individuals with a prior fracture. Cortical porosity at the radius was higher in T2D than non-T2D, but only among those who did not have a prior fracture. Findings from this large, community-based study of older adults suggest that modest deterioration in cortical bone and reductions in bone area may characterize diabetic bone disease in older adults. Evaluation of these deficits as predictors of fracture in T2D is needed to develop prevention strategies in this rapidly increasing population of older adults.