Indiana University-Purdue University Indianapolis (IUPUI) / Skeletal manifestations including short stature, osteoporosis, kyphoscoliosis, and tibial dysplasia cumulatively affect approximately 70% of patients with neurofibromatosis type 1 (NF1). Tibial pseudarthrosis, the chronic non-union of a spontaneous fracture, is a debilitating skeletal malady affecting young children with NF1. These non-healing fractures respond poorly to treatment and often require amputation of the affected limb due to limited understanding of the causative mechanisms. To better understand the cellular and molecular pathogenesis of these osseous defects, we have established a new mouse model which recapitulates a spectrum of skeletal pathologies frequently observed in patients with NF1. Nf1flox/-;Col2.3Cre mice, harboring Nf1 nullizygous osteoblasts on a Nf1+/- background, exhibit multiple osseous defects which are closely reminiscent of those found in NF1 patients, including runting (short stature), bone mass deficits, spinal deformities, and tibial fracture non-union. Through adoptive bone marrow transfer studies, we have demonstrated that the Nf1 haploinsufficient hematopoietic system pivotally mediates the pathogenesis of bone loss and fracture non-union in Nf1flox/-;Col2.3Cre mice. By genetic ablation of a single Nf1 allele in early myeloid development, under the control of LysMCre, we have further delineated that Nf1 haploinsufficient myeloid progenitors and osteoclasts are the culprit lineages mediating accelerated bone loss. Interestingly, conditional Nf1 haploinsufficiency in mature osteoclasts, induced by CtskCre, was insufficient to trigger enhanced lytic activity. These data provide direct genetic evidence for Nf1’s temporal significance as a gatekeeper of the osteoclast progenitor pool in primitive myelopoiesis. On the molecular level, we found that transforming growth factor-beta1 (TGF-β1), a primary mediator in the spatiotemporal coupling of bone remodeling, is pathologically overexpressed by five- to six- fold in both NF1 patients and in mice. Nf1 deficient osteoblasts, the principal source of TGF-β1 in the bone matrix, overexpress TGF-β1 in a gene dosage dependent fashion. Moreover, p21Ras dependent hyperactivation of the Smad pathway accentuates responses to pathological TGF-β1 signals in Nf1 deficient bone cells. As a proof of concept, we demonstrate that pharmacologic TβRI kinase inhibition can rescue bone mass defects and prevent tibial fracture non-union in Nf1flox/-;Col2.3Cre mice, suggesting that targeting TGF-β1 signaling in myeloid lineages may provide therapeutic benefit for treating NF1 skeletal defects.