Ebf1 is a transcription factor essential for B cell fate specification and function and important for the development of olfactory sensory neurons. We show here that Ebf1 also plays an important role in regulating osteoblast and adipocyte development in vivo. Ebf1 mRNA and protein is expressed in MSCs, in OBs at most stages of differentiation, and in adipocytes. Tibiae and femora from Ebf1(-/-) mice had a striking increase in all bone formation parameters examined including the number of OBs, osteoid volume, and bone formation rate. Serum osteocalcin, a marker of bone formation, was significantly elevated in mutant mice. The numbers of osteoclasts in bone were normal in younger (4 week-old) Ebf1(-/-) mice but increased in older (12 week-old) Ebf1(-/-) mice. This correlated well with in vitro osteoclast development from bone marrow cells. In addition to the increased osteoblastogenesis, there was a dramatic increase in adipocyte numbers in the bone marrow of Ebf1(-/-) mice. Increased adiposity was also seen histologically in the liver but not in the spleen of these mice, and accompanied by decreased deposition of adipose to subcutaneous sites. Thus Ebf1-deficient mice appear to be a new model of lipodystrophy. Ebf1 is a rare example of a transcription factor that regulates both the osteoblast and adipocyte lineages similarly.