The effects of locally applied zinc chloride (ZnCl₂) on early and late-stage parameters of fracture healing were evaluated in a diabetic rat model. Type 1 Diabetes has been shown to negatively impact mechanical parameters of bone as well as biologic markers associated with bone healing. Zinc treatments have been shown to reverse those outcomes in tests of nondiabetic and diabetic animals. This study is the first to assess the efficacy of a noncarrier mediated ZnCl₂ on bony healing in diabetic animals. This is a promising basic science approach which may lead to benefits for diabetic patients in the future. Treatment and healing were assessed through quantification of callus zinc, radiographic scoring, microcomputed tomography (µCT), histomorphometry, and mechanical testing. Local ZnCl₂ treatment increased callus zinc levels at 1 and 3 days after fracture (p ≤ 0.025). Femur fractures treated with ZnCl₂ showed increased mechanical properties after 4 and 6 weeks of healing. Histomorphometry of the ZnCl₂-treated fractures found increased callus cartilage area at Day 7 (p = 0.033) and increased callus bone area at Day 10 (p = 0.038). In contrast, callus cartilage area was decreased (p < 0.01) after 14 days in the ZnCl₂-treated rats. µCT analysis showed increased bone volume in the fracture callus of ZnCl₂-treated rats at 6 weeks (p = 0.0012) with an associated increase in the proportion of µCT voxel axial projections (Z-rays) spanning the fracture site. The results suggest that local ZnCl₂ administration improves callus chondrogenesis leading to greater callus bone formation and improved fracture healing in diabetic rats.