Studies of the identity and physiological function of mesenchymal stromal cells (MSCs) have been hampered by a lack of markers that permit both prospective identification and fate mapping in vivo. We found that Leptin Receptor (LepR) is a marker that ^highly enriches bone marrow MSCs. Approximately 0.3% of bone marrow cells were LepR⁺, 10% of which were CFU-Fs, accounting for 94% of bone marrow CFU-Fs. LepR⁺ cells formed bone, cartilage, and adipocytes in culture and upon transplantation in vivo. LepR⁺ cells were Scf-GFP⁺, Cxcl12-DsRed^high, and Nestin-GFP^low, markers which also ^highly enriched CFU-Fs, but negative for Nestin-CreER and NG2-CreER, markers which were unlikely to be found in CFU-Fs. Fate-mapping showed that LepR⁺ cells arose postnatally and gave rise to most bone and adipocytes formed in adult bone marrow, including bone regenerated after irradiation or fracture. LepR⁺ cells were quiescent, but they proliferated after injury. Therefore, LepR⁺ cells are the major source of bone and adipocytes in adult bone marrow.