Hematopoietic stem cells (HSCs) and their lympho-hematopoietic progeny are supported by microenvironmental niches within bone marrow; however, the identity, nature, and function of these niches remain unclear. Short-term ablation of CXC chemokine ligand (CXCL)12-abundant reticular (CAR) cells in vivo did not affect the candidate niches, bone-lining osteoblasts, or endothelial cells but severely impaired the adipogenic and osteogenic differentiation potential of marrow cells and production of the cytokines SCF and CXCL12 and led to a marked reduction in cycling lymphoid and erythroid progenitors. HSCs from CAR cell-depleted mice were reduced in number and cell size, were more quiescent, and had increased expression of early myeloid selector genes, similar to the phenotype of wild-type HSCs cultured without a niche. Thus, the niche composed of adipo-osteogenic progenitors is required for proliferation of HSCs and lymphoid and erythroid progenitors, as well as maintenance of HSCs in an undifferentiated state.