Type 2 diabetes is an emerging global health epidemic. Foundations for new therapies are arising from understanding interactions between body systems. Bone‐derived factors that reduce RANKL (receptor activator of NF‐kappa B ligand) signaling in the liver may prevent insulin resistance and the onset of type 2 diabetes. Here we demonstrate that deletion of the epigenetic regulator, Hdac3, in Osx1‐expressing osteoprogenitors prevents insulin resistance induced by high fat diet by increasing serum and skeletal gene expression levels of osteoprotegerin (Opg), a natural inhibitor of RANKL signaling. Removal of one Opg allele in mice lacking Hdac3 in Osx1+ osteoprogenitors increases the insulin resistance of the Hdac3‐deficient mice on a high fat diet. Thus, Hdac3‐depletion in osteoblasts increases expression of Opg, subsequently preserving insulin sensitivity. The Hdac inhibitor vorinostat also increased Opg transcription and histone acetylation of the Opg locus. These results define a new mechanism by which bone regulates systemic insulin sensitivity.