Stromal cells and osteoblasts play major roles in forming and modulating the bone marrow (BM) hematopoietic microenvironment. We have reported that FGF2 compromises stromal cell support of normal hematopoiesis. Here, we examined the effects of FGF2 on the leukemia microenvironment. In vitro, FGF2 significantly decreased the number of stromal-dependent and stromal-independent G0-leukemia cells in the stromal layers. Accordingly, CML cells placed on FGF2-treated stromal layers were more sensitive to imatinib. Conversely, FGF2 increased the proliferation of osteoblasts via FGFR1 IIIc, but its effects on osteoblast support of leukemia cell growth were limited. We next treated a human leukemia mouse model with Ara-C with/without systemic FGF2 administration. BM sections from FGF2-treated mice had thickened bone trabeculae and increased numbers of leukemia cells compared to controls. Leukemia cell density was increased, especially in the endosteal region in FGF2/Ara-C-treated mice compared to mice treated with Ara-C only. Interestingly, FGF2 did not promote leukemia cell survival in Ara-C treated spleen. Microarray analysis showed that FGF2 did not alter expression of many genes linked to hematopoiesis in osteoblasts, but modulated regulatory networks involved in angiogenesis and osteoblastic differentiation. These observations suggest that FGF2 promotes leukemia cell growth in the BM by modulating osteoblast functions.