Despite increasing evidence for the involvement of bone marrow (BM) hematopoietic stem cell niche in leukemogenesis, how BM mesenchymal stem and progenitor cells (MSPCs) contribute to leukemia niche formation and progression remains unclear. Using an MLL-AF9 acute myeloid leukemia (AML) mouse model, we demonstrate dynamic alterations of BM cellular niche components, including MSPCs and endothelial cells during AML development and its association with AML engraftment. Primary patient AML cells also induced similar niche alterations in xenografted mice. AML cell infiltration in BM causes an expansion of early B-cell factor 2+ (Ebf2+) MSPCs with reduced Cxcl12 expression and enhanced generation of more differentiated mesenchymal progenitor cells. Importantly, in vivo fate-mapping indicates that Ebf2+ MSPCs participated in AML niche formation. Ebf2+ cell deletion accelerated the AML development. These data suggest that native BM MSPCs may suppress AML. However, they can be remodeled by AML cells to form leukemic niche that might contribute to AML progression. AML induced dysregulation of hematopoietic niche factors like Angptl1, Cxcl12, Kitl, Il6, Nov, and Spp1 in AML BM MSPCs, which was associated with AML engraftment and partially appeared before the massive expansion of AML cells, indicating the possible involvement of the niche factors in AML progression. Our study demonstrates distinct dynamic features and roles of BM MSPCs during AML development.