Most skeletal fragility disorders are characterized by bone loss with a concurrent gain in marrow adipocytes 1-8. This suggests that a cell that forms adipocytes at the expense of osteoblasts is central to the pathogenesis of skeletal disorders. However, this cellular point of bifurcation between adipocyte and osteoblast differentiation pathways remains unknown. Here, we identify a new cell type defined by co-expression of skeletal stem cell and adipocyte precursor markers, 9-13 (CD24+CD29+ skeletal stem cells (SSCs)), that serves as a key cellular point of bifurcation between the osteoblast and adipocyte differentiation pathways, giving rise to closely related osteoblast and adipocyte lineage-restricted precursors. CD24+CD29+SSCs comprise a small fraction of SSCs, and only this fraction displays full stemness features, including the ability to undergo serial transplantation. In line with serving as the osteoblast/adipocyte bipotent cell, the “bone to fat” tissue remodeling occurring in models of postmenopausal osteoporosis or after high fat diet exposure occur in part by reprogramming these CD24+CD29+SSCs to change their output of lineage-restricted precursors. Lastly, as subcutaneous white adipose tissue displays a similar set of CD24+CD29+ stem cells and related lineage-restricted progenitors, these findings provide a new schema explaining the stem cell basis of bone versus adipose tissue production that unifies multiple mesenchymal tissues.