Estradiol is an important regulator of bone accumulation and maintenance. Circulating estrogens are primarily produced by the gonads. Aromatase, the enzyme responsible for the conversion of androgens to estrogen, is expressed by bone marrow cells (BMCs) of both hematopoietic and nonhematopoietic origin. While the significance of gonad-derived estradiol to bone health has been investigated, there is limited understanding regarding the relative contribution of BMC derived estrogens to bone metabolism. To elucidate the role of BMC derived estrogens in male bone, irradiated wild-type C57BL/6J mice received bone marrow cells transplanted from either WT (WT(WT)) or aromatase-deficient (WT(ArKO)) mice. MicroCT was acquired on lumbar vertebra to assess bone quantity and quality. WT(ArKO) animals had greater trabecular bone volume (BV/TV p = 0.002), with a higher trabecular number (p = 0.008), connectivity density (p = 0.017), and bone mineral content (p = 0.004). In cortical bone, WT(ArKO) animals exhibited smaller cortical pores and lower cortical porosity (p = 0.02). Static histomorphometry revealed fewer osteoclasts per bone surface (Oc.S/BS%), osteoclasts on the erosion surface (ES(Oc+)/BS, p = 0.04) and low number of osteoclasts per bone perimeter (N.Oc/B.Pm, p = 0.01) in WT(ArKO). Osteoblast-associated parameters in WT(ArKO) were lower but not statistically different from WT(WT). Dynamic histomorphometry suggested similar bone formation indices' patterns with lower mean values in mineral apposition rate, label separation, and BFR/BS in WT(ArKO) animals. Ex vivo bone cell differentiation assays demonstrated relative decreased osteoblast differentiation and ability to form mineralized nodules. This study demonstrates a role of local 17β-estradiol production by BMCs for regulating the quantity and quality of bone in male mice. Underlying in vivo cellular and molecular mechanisms require further study.