Acute myeloid leukaemia (AML) is distinguished by the generation of dysfunctional leukaemic blasts, and patients characteristically suffer from fatal infections and anaemia due to insufficient normal myelo-erythropoiesis. Direct physical crowding of bone marrow (BM) by accumulating leukaemic cells does not fully account for this haematopoietic failure. Here, analyses from AML patients were applied to both in vitro co-culture platforms and in vivo xenograft modelling, revealing that human AML disease specifically disrupts the adipocytic niche in BM. Leukaemic suppression of BM adipocytes led to imbalanced regulation of endogenous haematopoietic stem and progenitor cells, resulting in impaired myelo-erythroid maturation. In vivo administration of PPARγ agonists induced BM adipogenesis, which rescued healthy haematopoietic maturation while repressing leukaemic growth. Our study identifies a previously unappreciated axis between BM adipogenesis and normal myelo-erythroid maturation that is therapeutically accessible to improve symptoms of BM failure in AML via non-cell autonomous targeting of the niche.