ABSTRACT Hip fracture, which is associated with substantial morbidity and long‐term mortality, imposes a major burden on the healthcare system. Diabetes is a risk factor for osteoporosis, which is a crucial risk factor of hip fracture. However, epidemiological studies investigating the risk of hip fracture among patients with type 2 diabetes are limited. This study explored the association between hemoglobin A1c (HbA1c) and the risk of hip fracture in people with type 2 diabetes aged 65 years and older. We conducted a retrospective cohort study of 20 025 older patients with type 2 diabetes who participated in the National Diabetes Case Management Program in Taiwan. The HbA1c level at the baseline and hip fracture incidence over an average of 7.41 years of follow‐up were analyzed (maximum and standard deviation were 10.9 and 2.42 years, respectively). A total of 1514 hip fracture cases were recorded. The incidence rates of hip fracture were 9.15, 8.02, 9.58, 10.61, 12.51, and 13.43 per 1000 person‐years in patients with baseline HbA1c levels of < 6%, 6–7%, 7%–8%, 8%–9%, 9%–10%, and ≥ 10%, respectively. After multivariate adjustment, the risk of hip fracture increased among patients with HbA1c levels of 9%–10% and ≥ 10.0% compared with patients with HbA1c levels of 6–7% (hazard ratio, 1.24; 95% confidence interval, 1.02–1.49 and 1.32; 1.09–1.58, respectively). Significant linear trends among various HbA1c levels were observed (P  < 0.05). Patients with type 2 diabetes whose HbA1c levels exceeded 9.0% exhibited an increased risk of hip fracture, confirming a linear relationship. Our study's findings demonstrated the importance of glycemic control for fracture prevention in older adults with type 2 diabetes. © 2015 American Society for Bone and Mineral Research