Abstract Body (Do not enter title and authors here): During peripheral vascular disease and aging, adipose tissue within the bone marrow expands while the trabecular red marrow contracts. The impact of these changes on blood cell formation remains unclear. To address this question, we performed single-cell and single-nuclei transcriptomic analysis on adipose-rich yellow bone marrow (BMY) and adipose-poor trabecular red marrow (BMR) from human subjects undergoing lower limb amputations. Surprisingly, we discovered two distinct hematopoietic niches, in which BMY contains a higher number of monocytes and progenitor cells expressing pro-inflammatory gene signatures. To further investigate these niches, we developed an in-vitro organoid system that recapitulates key features of the human bone marrow. Progenitor cells from BMY exhibited enriched expression of the leptin receptor, and responded to leptin with increased proliferation and monocyte production. These findings suggest that the age-associated expansion of bone marrow adipose tissue promotes a pro-inflammatory state by stimulating monocyte production from a spatially distinct, leptin-responsive hematopoietic stem/progenitor cell population.