Patients with estrogen receptor-positive (ER+) breast cancer, the most common subtype, remain at risk for lethal metastatic disease years after diagnosis. Recurrence arises partly because tumor cells in bone marrow become resistant to estrogen-targeted therapy. Here, we utilized a co-culture model of bone marrow mesenchymal stem cells (MSCs) and ER+ breast cancer cells to recapitulate interactions of cancer cells in bone marrow niches. ER+ breast cancer cells in direct contact with MSCs acquire cancer stem-like (CSC) phenotypes with increased resistance to standard antiestrogenic drugs. We confirmed that co-culture with MSCs increased labile iron in breast cancer cells, a phenotype associated with CSCs and disease progression. Clinically approved iron chelators and in-house lysosomal iron-targeting compounds restored sensitivity to antiestrogenic therapy. These findings establish iron modulation as a mechanism to reverse MSC-induced drug resistance and suggest iron modulation in combination with estrogen-targeted therapy as a promising, translatable strategy to treat ER+ breast cancer.