2,3,7,8-Tetrachlorodibenzo-p-dioxin (TCDD) and other aryl hydrocarbon receptor (AhR) agonists have been shown to regulate bone development and remodeling in a species-, ligand-, and age-specific manner, however the underlying mechanisms remain poorly understood. In this study, we characterized the effect of 0.01-30 μg/kg TCDD on the femoral morphology of male and female juvenile mice orally gavaged every 4 days for 28 days and used RNA-Seq to investigate gene expression changes associated with the resultant phenotype. Micro-computed tomography revealed that TCDD dose-dependently increased trabecular bone volume fraction (BVF) 2.9- and 3.3-fold in male and female femurs, respectively. Decreased serum tartrate-resistant acid phosphatase (TRAP) levels, combined with a reduced osteoclast surface to bone surface ratio and repression of femoral proteases (cathepsin K, matrix metallopeptidase 13), suggests that TCDD impaired bone resorption. Increased osteoblast counts at the trabecular bone surface were consistent with a reciprocal reduction in the number of bone marrow adipocytes, suggesting AhR activation may direct mesenchymal stem cell differentiation towards osteoblasts rather than adipocytes. Notably, femoral expression of transmembrane glycoprotein NMB (Gpnmb; osteoactivin), a positive regulator of osteoblast differentiation and mineralization, was dose-dependently induced up to 18.8-fold by TCDD. Moreover, increased serum levels of 1,25-dihydroxyvitamin D were in accordance with the renal induction of 1α-hydroxylase Cyp27b1 and may contribute to impaired bone resorption. Collectively, the data suggest AhR activation tipped the bone remodeling balance towards bone formation, resulting in increased bone mass with reduced marrow adiposity.