The hypoxia-inducible factor-1α (HIF-1α) pathway coordinates skeletal bone homeostasis and endocrine functions. Activation of the HIF-1α pathway increases glucose uptake by osteoblasts, which reduces blood glucose levels. However, it is unclear whether activating the HIF-1α pathway in osteoblasts can help normalize glucose metabolism under diabetic conditions through its endocrine function. In addition to increasing bone mass and reducing blood glucose levels, activating the HIF-1α pathway by specifically knocking out Von Hippel‒Lindau (Vhl) in osteoblasts partially alleviated the symptoms of streptozotocin (STZ)-induced type 1 diabetes mellitus (T1DM), including increased glucose clearance in the diabetic state, protection of pancreatic β cell from STZ-induced apoptosis, promotion of pancreatic β cell proliferation, and stimulation of insulin secretion. Further screening of bone-derived factors revealed that islet regeneration-derived protein III gamma (RegIIIγ) is an osteoblast-derived hypoxia-sensing factor critical for protection against STZ-induced T1DM. In addition, we found that iminodiacetic acid deferoxamine (SF-DFO), a compound that mimics hypoxia and targets bone tissue, can alleviate symptoms of STZ-induced T1DM by activating the HIF-1α-RegIIIγ pathway in the skeleton. These data suggest that the osteoblastic HIF-1α-RegIIIγ pathway is a potential target for treating T1DM.