The aim of the present study was to highlight the newly discovered metabolic role of oxytocin (OT) in the type I diabetic rats. Previous studies have demonstrated that OT has a beneficial role on bone physiology and therefore, the OT effect on the diabetic osteopathy will be assessed as well. Induction of the type I diabetes was carried out by an intraperitoneal injection of 60 mg/kg body weight of streptozotocin. The metabolic role of OT on diabetic rats after OT treatment with intramuscular injection of 40 µIU/kg body weight for 6 weeks was assessed. Histological and ultrastructural studies of rat pancreas samples, before and after the OT injection, were performed and compared with the obtained physiological results. Oxytocin treatment had positive metabolic effects in diabetic rats. This is based on the change in glucose metabolism, lipid profile, and insulin sensitivity in experimental animals. In addition, OT treatment showed histological regenerative changes of pancreatic islet cells of diabetic rats. Moreover, OT administration showed that it has an anabolic effect on the bone biology. The results suggest that activation of the oxytocin receptor (OTR) pathway by infusion of OT, OT analogs, or OT agonists may represent a promising approach for the treatment of diabetes and some of its complications, including diabetic osteopathy.