Accumulation of advanced glycation end-products (AGE) in bone alters collagen structure and function. Fluorescent AGEs are associated with fractures but less is known regarding non-fluorescent AGEs. We examined associations of carboxy-methyl-lysine (CML), with incident clinical and prevalent vertebral fractures by type 2 diabetes (T2D) status, in the Health, Aging, and Body Composition cohort of older adults. Incident clinical fractures and baseline vertebral fractures were assessed. Cox regression was used to analyze the associations between serum CML and clinical fracture incidence, and logistic regression for vertebral fracture prevalence. At baseline, mean ± standard deviation (SD) age was 73.7 ± 2.8 and 73.6 ± 2.9 years in T2D (n = 712) and non-diabetes (n = 2332), respectively. Baseline CML levels were higher in T2D than non-diabetes (893 ± 332 versus 771 ± 270 ng/mL, p < 0.0001). In multivariate models, greater CML was associated with higher risk of incident clinical fracture in T2D (hazard ratio [HR] 1.49;​ 95% confidence interval [CI], 1.24–1.79 per 1-SD increase in log CML) but not in non-diabetes (HR 1.03;​ 95% CI, 0.94–1.13;​ p for interaction = 0.001). This association was independent of bone mineral density (BMD), glycated hemoglobin (hemoglobin A1c), weight, weight loss, smoking, cystatin-C, and medication use. CML was not significantly associated with the odds of prevalent vertebral fractures in either group. In conclusion, higher CML levels are associated with increased risk of incident clinical fractures in T2D, independent of BMD. These results implicate CML in the pathogenesis of bone fragility in diabetes.