Pancytopenia is a major cause of morbidity in acute myeloid leukemia (AML), yet its cause is unclear. Normal osteoblastic cells have been shown to support hematopoiesis. To define the effects of leukemia on osteoblastic cells, we used an immunocompetent murine model of AML. Leukemic mice had inhibition of osteoblastic cells, with decreased serum levels of the bone formation marker osteocalcin. Osteoprogenitor cells and endosteal-lining osteopontin(+) cells were reduced, and osteocalcin mRNA in CD45(-) marrow cells was diminished. This resulted in severe loss of mineralized bone. Osteoclasts were only transiently increased without significant increases in bone resorption, and their inhibition only partially rescued leukemia-induced bone loss. In vitro data suggested that a leukemia-derived secreted factor inhibited osteoblastic cells. Because the chemokine CCL-3 was recently reported to inhibit osteoblastic function in myeloma, we tested its expression in our model and in AML patients. Consistent with its potential novel role in leukemic-dependent bone loss, CCL-3 mRNA was significantly increased in malignant marrow cells from leukemic mice and from samples from AML patients. Based on these results, we propose that therapeutic mitigation of leukemia-induced uncoupling of osteoblastic and osteoclastic cells may represent a novel approach to promote normal hematopoiesis in patients with myeloid neoplasms.