Successive adaptation of the bone marrow (BM) from homeostatic hematopoietic microenvironment to a self-reinforcing niche is an integral aspect of leukemogenesis. Yet, the cellular mechanisms underlying these functional alterations remain to be defined. Here, we found that AML incursion precipitates compartmental endoplasmic reticulum (ER) stress and an unfolded protein response (UPR) in both leukemia and stromal cells. We observed that extracellular vesicles (EV) transmit ER stress in vivo from the AML xenograft to BM stroma, whereby the upregulation of core UPR components drives subsequent osteolineage differentiation of mesenchymal stem cells (MSC). Finally, we show that the underlying mechanism involves quantitative incorporation and cell-cell transfer of Bone Morphogenic Protein 2 (BMP2), a potent osteogenic signal, by AML-EVs. Corroborative studies in AML patient samples support the translational relevance of AML-EVs as a platform for BMP trafficking and source of compartmental crosstalk. Transmissible ER stress was previously identified as a source of chemoresistance in solid tumor models, and this work reveals a role in remodeling the BM niche in AML.