Diabetes mellitus is associated with increased risk of osteopenia and bone fracture that may be related to hyperglycemia. However, the mechanisms accounting for diabetic bone disorder are unclear. Here, we showed that high glucose significantly promoted the production of reactive oxygen species (ROS) in rat primary osteoblasts. Most importantly, we reported for the first time that ROS induced by high glucose increased alkaline phosphatase activity, inhibited type I collagen (collagen I) protein level and cell mineralization, as well as gene expression of osteogenic markers including runt-related transcription factor 2 (Runx2), collagen I, and osteocalcin, but promoted lipid droplet formation and gene expression of adipogenic markers including peroxisome proliferator-activated receptor gamma, adipocyte fatty acid binding protein (aP2), and adipsin, which were restored by pretreatment with N-acetyl-L-cysteine (NAC), a ROS scavenger. Moreover, high glucose-induced oxidative stress activated PI3K/Akt pathway to inhibited osteogenic differentiation but stimulated adipogenic differentiation. In contrast, NAC and a PI3K inhibitor, LY-294002, reversed the down-regulation of osteogenic markers and the up-regulation of adipogenic markers as well as the activation of Akt under high glucose. These results indicated that oxidative stress played a key role in high glucose-induced increase of adipogenic differentiation, which contributed to the inhibition of osteogenic differentiation. This process was mediated by PI3K/Akt pathway in rat primary osteoblasts. Hence, suppression of oxidative stress could be a potential therapeutic approach for diabetic osteopenia. J. Cell. Biochem. 114: 2595–2602, 2013. © 2013 Wiley Periodicals, Inc.