ObjectiveTo review the research progress on the major microenvironmental abnormalities in diabetic bone defect repair and functional biomaterial-based intervention strategies. Methods Relevant literature on diabetic bone defect repair and functional biomaterial-based interventions was reviewed and synthesized, with emphasis on the core pathological features of the diabetic bone defect repair microenvironment, principal regulatory strategies, representative material platforms, and the current status of clinical translation. Results Persistent hyperglycemia promotes the accumulation of advanced glycation end products and excessive generation of reactive oxygen species (ROS), together with osteoimmune dysregulation, unresolved chronic inflammation, and microvascular dysfunction. These abnormalities collectively impair cell recruitment, vascular regeneration, and new bone formation. Functional biomaterials are designed to modulate macrophage polarization and inflammatory responses, restore angiogenic-osteogenic coupling, and enable on-demand therapeutic release in response to pathological cues such as glucose and ROS, thereby improving the local regenerative microenvironment. Hydrogels, bioactive inorganic or composite materials, and multifunctional delivery systems constitute the principal material platforms. However, their broader application remains limited by inadequate mechanical suitability, insufficient manufacturing reproducibility, and a lack of robust clinical evidence. ConclusionSustained dysregulation of the local microenvironment is a central determinant of impaired diabetic bone defect repair. Future biomaterial design should prioritize the precise recognition and active remodeling of the diabetes-specific pathological microenvironment to enhance bone regeneration and osseointegration.