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Mechanisms leading to age-related reductions in bone formation and subsequent osteoporosis are still incompletely understood. We recently demonstrated that kynurenine (KYN), a tryptophan metabolite, accumulates in serum of aged mice and induces bone loss. Here, we report on novel mechanisms underlying KYN's detrimental effect on bone aging.We show that KYN is increased with aging in murine bone marrow mesenchymal stem cells (BMSCs). KYN reduces bone formation via modulating levels of CXCL12 and its receptors as well as histone deacetylase 3 (Hdac3). BMSCs responded to KYN by significantly decreasing mRNA expression levels of CXCL12 and its cognate receptors, CXCR4 and ACKR3, as well as downregulating osteogenic gene RUNX2 expression, resulting in a significant inhibition in BMSCs osteogenic differentiation. KYN's effects on these targets occur by increasing regulatory miRNAs that target osteogenesis, specifically miR29b-1-5p.Thus, KYN significantly upregulated the anti-osteogenic miRNA miR29b-1-5p in BMSCs, mimicking the up-regulation of miR-29b-1-5p in human and murine BMSCs with age. Direct inhibition of miR29b-1-5p by antagomirs rescued CXCL12 protein levels downregulated by KYN, while a miR29b-1-5p mimic further decreased CXCL12 levels. KYN also significantly downregulated mRNA levels of Hdac3, a target of miR-29b-1-5p, as well as its cofactor NCoR1. KYN is a ligand for the aryl hydrocarbon receptor (AhR). We hypothesized that AhR mediates KYN's effects in BMSCs. Indeed, AhR inhibitors (CH-223191 and 3′,4′-dimethoxyflavone [DMF]) partially rescued secreted CXCL12 protein levels in BMSCs treated with KYN. Importantly, we found that treatment with CXCL12, or transfection with an miR29b-1-5p antagomir, downregulated the AhR mRNA level, while transfection with miR29b-1-5p mimic significantly upregulated its level. Further, CXCL12 treatment downregulated IDO, an enzyme responsible for generating KYN. Our findings reveal novel molecular pathways involved in KYN's age-associated effects in the bone microenvironment that may be useful translational targets for treating osteoporosis.