Objective. Osteolysis and low bone mineral density (BMD) are underappreciated consequences of several chronic diseases that may elevate the risk for fracture. The purpose of this study was to assess tarsal BMD associated with acute inflammation (ie, inflammatory osteolysis) in individuals with chronic diabetes mellitus (DM), peripheral neuropathy (PN), and recent-onset neuropathic (Charcot) arthropathy (NCA) of the foot. Research Design and Methods. This was a case-control study of 32 people (11 men, 21 women) with DM, PN, and NCA of the foot or ankle. The subjects with DM, PN, and NCA were compared with 64 age-, sex-, and race-matched control subjects (24 men, 40 women) without DM, PN or NCA. Within the first 3 weeks of cast immobilization, BMD was estimated in both calcanei using quantitative ultrasonometry. Acute inflammation was confirmed by comparing skin temperature differences between the feet of the subjects with DM, PN, and NCA and the feet of the control subjects. Results. Skin temperature differences averaged 6.7°F (SD=4.0°F) (involved foot minus noninvolved foot) in the feet of the subjects with DM, PN, and NCA compared with 0.0°F (SD=1.3°F) in the feet of the control subjects. Calcaneal BMD averaged 384 mg/cm2 (SD=110) in the involved feet and 467 mg/cm2 (SD= 123) in the noninvolved feet of the subjects with DM, PN, and NCA and 545 mg/cm2 (SD=121) in combined right and left feet of the control subjects. Conclusions. Inflammation in individuals with DM, PN, and NCA may contribute to or exacerbate a rapid loss of BMD. Inflammatory osteolysis may be a prominent factor responsible for both the spontaneous onset of neuropathic fracture and the insidious and progressive foot deformity that is the hallmark of the chronic Charcot foot.