Hematopoietic stem cells (HSCs) reside in regulatory niches in the bone marrow (BM). Although HSC niches have been extensively characterized, the role of endosteal osteoblasts (OBs) in HSC regulation requires further clarification, and the role of OBs in regulating leukemic stem cells (LSCs) is not well studied. We used an OB visualization and ablation mouse model to study the role of OBs in regulating normal HSCs and chronic myelogenous leukemia (CML) LSCs. OB ablation resulted in increase in cells with a LSK Flt3- CD150+ CD48- long-term HSC (LTHSC) phenotype but reduction of a more highly selected LSK Flt3- CD34- CD49b- CD229- LTHSC subpopulation. LTHSCs from OB-ablated mice demonstrated loss of quiescence and reduced long-term engraftment and self-renewal capacity. Ablation of OB in a transgenic CML mouse model resulted in accelerated leukemia development with reduced survival compared with control mice. The notch ligand Jagged-1 was overexpressed on CML OBs. Normal and CML LTHSCs cultured with Jagged-1 demonstrated reduced cell cycling, consistent with a possible role for loss of Jagged-1 signals in altered HSC and LSC function after OB ablation. These studies support an important role for OBs in regulating quiescence and self-renewal of LTHSCs and a previously unrecognized role in modulating leukemia development in CML.