In diabetic patients, the risk of fracture is high because of impaired bone formation. However, the details of the mechanisms in the development of diabetic osteoporosis remain unclear. In the current study, we investigated the role of plasminogen activator inhibitor (PAI)-1 in the pathogenesis of type 1 diabetic osteoporosis by using PAI-1–deficient mice. Quantitative computed tomography analysis showed that PAI-1 deficiency protected against streptozotocin-induced bone loss in female mice but not in male mice. PAI-1 deficiency blunted the changes in the levels of Runx2, osterix, and alkaline phosphatase in tibia as well as serum osteocalcin levels suppressed by the diabetic state in female mice only. Furthermore, the osteoclast levels in tibia, suppressed in diabetes, were also blunted by PAI-1 deficiency in female mice. Streptozotocin markedly elevated the levels of PAI-1 mRNA in liver in female mice only. In vitro study demonstrated that treatment with active PAI-1 suppressed the levels of osteogenic genes and mineralization in primary osteoblasts from female mouse calvaria. In conclusion, the current study indicates that PAI-1 is involved in the pathogenesis of type 1 diabetic osteoporosis in females. The expression of PAI-1 in the liver and the sensitivity of bone cells to PAI-1 may be an underlying mechanism.