Retinoic acid receptor (RAR) signaling regulates bone structure and hematopoiesis through intrinsic and extrinsic mechanisms. This study aimed to establish how early in the osteoblast lineage loss of RARγ (Rarg) disrupts the bone marrow microenvironment. Bone structure was analyzed by micro-computed tomography (μCT) in Rarg mice and mice with Rarg conditional deletion in Osterix-Cre-targeted osteoblast progenitors or Prrx1-Cre-targeted mesenchymal stem cells. Rarg tibias exhibited less trabecular and cortical bone and impaired longitudinal and radial growth. The trabecular bone and longitudinal, but not radial, growth defects were recapitulated in Prrx1:Rarg mice but not Osx1:Rarg mice. Although both male and female Prrx1:Rarg mice had low trabecular bone mass, males exhibited increased numbers of trabecular osteoclasts and Prrx1:Rarg females had impaired mineral deposition. Both male and female Prrx1:Rarg growth plates were narrower than controls and their epiphyses contained hypertrophic chondrocyte islands. Flow cytometry revealed that male Prrx1:Rarg bone marrow exhibited elevated pro-B and pre-B lymphocyte numbers, accompanied by increased Cxcl12 expression in bone marrow cells. Prrx1:Rarg bone marrow also had elevated megakaryocyte-derived Vegfa expression accompanied by smaller sinusoidal vessels. Thus, RARγ expression by Prrx1-Cre-targeted cells directly regulates endochondral bone formation and indirectly regulates tibial vascularization. Furthermore, RARγ expression by Prrx1-Cre-targeted cells extrinsically regulates osteoclastogenesis and B lymphopoiesis in male mice. © 2018 American Society for Bone and Mineral Research.