Calorie restriction (CR) can lead to weight loss and decreased substrate availability for bone cells. Ultimately, this can lead to impaired peak bone acquisition in children and adolescence and bone loss in adults. But the mechanisms that drive diet-induced bone loss in humans are not well characterized. To explore those in greater detail, we examined the impact of 30% CR for 4 and 8wk in both male and female 8-wk-old C57BL/6J mice. Body composition, areal bone mineral density (aBMD), skeletal microarchitecture by micro-CT, histomorphometric parameters, and in vitro trajectories of osteoblast and adipocyte differentiation were examined. After 8wk, CR mice lost weight and exhibited lower femoral and whole-body aBMD vs ad libitum (AL) mice. By micro-CT, CR mice had lower cortical bone area fraction vs AL mice, but males had preserved trabecular bone parameters and females showed increased bone volume fraction compared to AL mice. Histomorphometric analysis revealed that CR mice had a profound suppression in trabecular as well as endocortical and periosteal bone formation in addition to reduced bone resorption compared to AL mice. Bone marrow adipose tissue was significantly increased in CR mice. In vitro, the pace of adipogenesis in bone marrow stem cells was greatly accelerated with higher markers of adipocyte differentiation and more oil red O staining, whereas osteogenic differentiation was reduced. qRT-PCR and western blotting suggested that the expression of Wnt16 and the canonical β-catenin pathway was compromised during CR. In sum, CR causes impaired peak cortical bone mass due to a profound suppression in bone remodeling. The increase in marrow adipocytes in vitro and in vivo is related to both progenitor recruitment and adipogenesis in the face of nutrient insufficiency. Long-term CR may lead to lower bone mass principally in the cortical envelope, possibly due to impaired Wnt signaling.