The interaction with bone marrow (BM) plays a crucial role in pathophysiological features of multiple myeloma (MM), including cell proliferation, chemoresistance, and bone lesion progression. To characterize the MM-BM interactions, we utilized an in vivo experimental model for human MM in which a GFP-expressing human MM cell line is transplanted into NOG mice (the NOG-hMM model). Transplanted MM cells preferentially engrafted at the metaphyseal region of the BM endosteum and formed a complex with osteoblasts and osteoclasts. A subpopulation of MM cells expressed VE-cadherin after transplantation and formed endothelial-like structures in the BM. CD138(+) myeloma cells in the BM were reduced by p53-dependent apoptosis following administration of the nitrogen mustard derivative bendamustine to mice in the NOG-hMM model. Bendamustine maintained the osteoblast lining on the bone surface and protected extracellular matrix structures. Furthermore, bendamustine suppressed the growth of osteoclasts and mesenchymal cells in the NOG-hMM model. Since VE-cadherin(+) MM cells were chemoresistant, hypoxic, and HIF-2α-positive compared to the VE-cadherin(-) population, VE-cadherin induction might depend on the oxygenation status. The NOG-hMM model described here is a useful system to analyze the dynamics of MM pathophysiology, interactions of MM cells with other cellular compartments, and the utility of novel anti-MM therapies.