Skeletal stem cells (SSCs) that are the major source of osteoblasts and adipocytes in adult bone marrow express leptin receptor (LepR). To test whether LepR regulates SSC function, we conditionally deleted Lepr from limb bone marrow stromal cells, but not from the axial skeleton or hypothalamic neurons, using Prx1-Cre. Prx1-Cre;Lepr(fl/fl) mice exhibited normal body mass and normal hematopoiesis. However, limb bones from Prx1-Cre;Lepr(fl/fl) mice exhibited increased osteogenesis, decreased adipogenesis, and accelerated fracture healing. Leptin increased adipogenesis and reduced osteogenesis by activating Jak2/Stat3 signaling in bone marrow stromal cells. A high-fat diet increased adipogenesis and reduced osteogenesis in limb bones from wild-type mice, but not from Prx1-Cre;Lepr(fl/fl) mice. This reflected local effects of LepR on osteogenesis and adipogenesis by bone marrow stromal cells and systemic effects on bone resorption. Leptin/LepR signaling regulates adipogenesis and osteogenesis by mesenchymal stromal cells in the bone marrow in response to diet and adiposity.