The use of thiazolidinediones (TZDs) has been associated with an increased fracture risk. In addition, type 2 diabetes mellitus (T2DM) has been linked with fracture. We evaluated to what extent the association between TZD use and fracture risk is related to the drug or to the underlying disease. We conducted a population-based cohort study using the Danish National Health Registers (1996-2007), which link pharmacy data to the national hospital registry. Oral antidiabetic users (n = 180,049) were matched 1:3 by year of birth and sex to nonusers. Cox proportional hazards models were used to estimate hazard ratios (HRs) of fracture. Time-dependent adjustments were made for age, comorbidity, and drug use. We created a proxy indicator for the severity of disease. The first stage was defined as current use of either a biguanide or a sulfonyluerum, the second stage as current use of a biguanide and a sulfonyluerum at the same time, the third stage as patients using TZDs, and the fourth stage as patients using insulin. The risk of osteoporotic fracture was increased 1.3-fold for stages 3 and 4 compared with controls. Risk with current TZD use (stage 3 HR = 1.27, 95 % CI 1.06-1.52) and risk with current use of insulin (stage 4 HR = 1.25, 95 % CI 1.20-1.31) were similar. In the first (HR = 1.15, 95 % CI 1.13-1.18) and second (HR = 1.00, 95 % CI 0.96-1.04) stages risks were lower. Risk of osteoporotic fracture was similar for TZD users and insulin users. When studying fracture risk with TZDs, the underlying T2DM should be taken into account.