The cytosolic protein Sharpin is a component of the linear ubiquitin chain assembly complex, which regulates NF-κB signaling in response to specific ligands, such as TNF-α. Its inactivating mutation in chronic proliferative dermatitis mutation (Cpdm) mice causes multiorgan inflammation, yet this phenotype is not transferable into wild-type mice by hematopoietic stem cell transfer. Recent evidence demonstrated that Cpdm mice additionally display low bone mass, and that this osteopenia is corrected by Tnf deletion. Because the cellular mechanism underlying this pathology, however, was still undefined, we performed a thorough skeletal phenotyping of Cpdm mice on the basis of nondecalcified histology and cellular and dynamic histomorphometry. We show that the trabecular and cortical osteopenia in Cpdm mice is solely explained by impaired bone formation, whereas osteoclastogenesis is unaffected. Consistently, Cpdm primary calvarial cells display reduced osteogenic capacity ex vivo, and the same was observed with CD11b− bone marrow cells. Unexpectedly, short-term treatment of these cultures with TNF-α did not reveal an impaired molecular response in the absence of Sharpin. Instead, genome-wide and gene-specific expression analyses revealed that Cpdm mesenchymal cells display increased responsiveness toward TNF-α–induced expression of specific cytokines, such as CXCL5, IL-1β, and IL-6. Therefore, our data not only demonstrate that the skeletal defects of Cpdm mice are specifically caused by impaired differentiation of osteoprogenitor cells, they also suggest that increased cytokine expression in mesenchymal bone marrow cells contributes to the inflammatory phenotype of Cpdm mice.