Purpose: Anthracyclines (including doxorubicin) are still the backbone of commonly used breast cancer chemotherapy regimens. Despite increasing use of doxorubicin and cyclophosphamide (AC) combinations for treating breast cancer, their potential to cause adverse skeletal effects remains unclear. Methods: This study examined the effects of treatments with the AC regimen on bone and bone marrow in adult female rats. Results: AC treatment for four cycles (weekly intravenous injection of 2 mg/kg doxorubicin and 20 mg/kg cyclophosphamide) resulted in a reduced volume of trabecular bone at the metaphysis, which was associated with reduced serum levels of 25-hydroxy vitamin D3 and alkaline phosphatase. Reductions in densities of osteocytes and bone lining cells were also observed. In addition, bone marrow was severely damaged, including a severe reduction in bone marrow cellularity and an increase in marrow adipocyte content. Accompanying these changes, there were increases in mRNA expression of adipogenesis regulatory genes (PPARγ and FABP4) and an inflammatory cytokine (TNFα) in metaphysis bone and bone marrow. Conclusions: This study indicates that AC chemotherapy may induce some bone loss, due to reduced bone formation, and bone marrow damage, due to increased marrow adiposity. Preventive strategies for preserving the bone and bone marrow microenvironment during anthracycline chemotherapy warrant further investigation.