Long‐term treatment of mice or humans with granulocyte colony‐stimulating factor (G‐CSF) is associated with a clinically significant osteopenia characterized by increased osteoclast activity and number. In addition, recent reports have observed a decrease in number of mature osteoblasts during G‐CSF administration. However, neither the extent of G‐CSF's suppressive effect on the osteoblast compartment nor its mechanisms are well understood. Herein, we show that short‐term G‐CSF treatment in mice leads to decreased numbers of endosteal and trabecular osteoblasts. The effect is specific to mature osteoblasts, because bone‐lining cells, osteocytes, and periosteal osteoblasts are unaffected. G‐CSF treatment accelerates osteoblast turnover in the bone marrow by inducing osteoblast apoptosis. In addition, whereas G‐CSF treatment sharply increases osteoprogenitor number, differentiation of mature osteoblasts is impaired. Bone marrow transplantation studies show that G‐CSF acts through a hematopoietic intermediary to suppress osteoblasts. Finally, G‐CSF treatment, through suppression of mature osteoblasts, also leads to a marked decrease in osteoprotegerin expression in the bone marrow, whereas expression of RANKL remains relatively constant, suggesting a novel mechanism contributing to the increased osteoclastogenesis seen with long‐term G‐CSF treatment. In sum, these findings suggest that the hematopoietic system may play a novel role in regulating osteoblast differentiation and apoptosis during G‐CSF treatment.