Both diabetes and osteoporosis have developed into major global public health problems due to the increasing aging population. It is crucial to screen populations at higher risk of developing osteoporosis for disease prevention and management in postmenopausal women with type 2 diabetes (T2D). This study aims to quantitatively investigate the association between risk factors and bone mineral density (BMD) and develop a self-assessment tool for early osteoporosis screening in postmenopausal women with T2D. We retrospectively enrolled 1,309 postmenopausal women with T2D. Linear regression methods were used to assess the association between risk factors and BMD. Additionally, a multivariate logistic regression analysis was performed to identify independent risk factors associated with osteoporosis. Utilizing the logistic regression machine learning algorithm, we developed an osteoporosis screening tool that categorizes the population into three risk regions based on age and body mass index (BMI), indicating low, moderate, and high prevalence of osteoporosis in the age-BMI plane. Older age and lower BMI were independently associated with decreased BMD. The BMD at the total hip, femur neck, and lumbar spine differed by 12.9, 10.9, and 15.5 mg/cm2 for each 1 unit increase in BMI, respectively. Both age and BMI were identified as independent predictors of osteoporosis. The osteoporosis screening tool was developed by using two straight lines with equations of BMI = 0.56 * age-4.12 and BMI = 0.56 * age-10.88; there were no significant differences in the prevalence of osteoporosis among the training, internal test, and external test datasets in the low-, moderate-, and high-risk regions. We have successfully developed and validated a self-assessment tool for early osteoporosis screening in postmenopausal women with T2D for the first time. BMI was identified as a significant modifiable risk factor. Our study may improve awareness of osteoporosis and is valuable for disease prevention and management for postmenopausal women with T2D.