The bone marrow (BM) microenvironment, known as the BM niche, regulates hematopoiesis but is also affected by interactions with hematopoietic cells. Recent evidence indicates that extracellular matrix components are involved in these interactions. Chondroitin sulfate (CS), a glycosaminoglycan, is a major component of the extracellular matrix; however, it is not known whether CS has a physiological role in hematopoiesis. Here, we analyzed the functions of CS in hematopoietic and niche cells. CSGalNAcT1, which encodes CS N-acetylgalactosaminyltransferase-1 (T1), a key enzyme in CS biosynthesis, was highly expressed in hematopoietic stem and progenitor cells (HSPCs) and endothelial cells (ECs), but not in mesenchymal stromal cells (MSCs) in BM. In T1 knockout (T1KO) mice, a greater number of HSPCs existed compared with the wild-type (WT), but HSPCs from T1KO mice showed significantly impaired repopulation in WT recipient mice on serial transplantation. RNA sequence analysis revealed the activation of IFN-α/β signaling and endoplasmic reticulum stress in T1KO HSPCs. In contrast, the number of WT HSPCs repopulated in T1KO recipient mice was larger than that in WT recipient mice after serial transplantation, indicating that the T1KO niche supports repopulation of HSPCs better than the WT niche. There was no obvious difference in the distribution of vasculature and MSCs between WT and T1KO BM, suggesting that CS loss alters vascular niche functions without affecting its structure. Our results revealed distinct roles of CS in hematopoietic cells and BM niche, indicating that crosstalk between these components is important to maintain homeostasis in BM.