Multipotent stromal cells (MSCs) and their osteoblastic lineage cell (OBC) derivatives are part of the bone marrow (BM) niche and contribute to hematopoietic stem cell (HSC) maintenance. Here, we show that myeloproliferative neoplasia (MPN) progressively remodels the endosteal BM niche into a self-reinforcing leukemic niche that impairs normal hematopoiesis, favors leukemic stem cell (LSC) function, and contributes to BM fibrosis. We show that leukemic myeloid cells stimulate MSCs to overproduce functionally altered OBCs, which accumulate in the BM cavity as inflammatory myelofibrotic cells. We identify roles for thrombopoietin, CCL3, and direct cell-cell interactions in driving OBC expansion, and for changes in TGF-β, Notch, and inflammatory signaling in OBC remodeling. MPN-expanded OBCs, in turn, exhibit decreased expression of many HSC retention factors and severely compromised ability to maintain normal HSCs, but effectively support LSCs. Targeting this pathological interplay could represent a novel avenue for treatment of MPN-affected patients and prevention of myelofibrosis. Copyright © 2013 Elsevier Inc. All rights reserved.