Hematopoiesis is dependent upon the bone marrow microenvironment, which is comprised of multiple mesenchymal cell types, including fibroblasts, endothelial cells, osteoblasts, and stroma progenitors. The canonical Wnt signaling pathway, which relies on the beta-catenin protein to mediate its signal, is necessary for the normal development of mesenchymal tissue. We hypothesized that canonical Wnt signaling regulates the cellular composition and function of the bone marrow microenvironment. We observed that a beta-catenin-deficient bone marrow microenvironment maintained hematopoietic stem cells but exhibited a decreased capacity to support primitive hematopoietic cells. These results correlated with decreased numbers of osteoblasts and with decreased production of basic fibroblast growth factor, stem cell factor, and vascular cell adhesion molecule-1. From these data, we propose a model in which beta-catenin in the microenvironment is required noncell autonomously for long-term maintenance of hematopoietic progenitors.