ABSTRACT The relationship between marrow adipose tissue (MAT) and bone health is poorly understood. We used running exercise to ask whether obesity‐associated MAT can be attenuated via exercise and whether this correlates with gains in bone quantity and quality. C57BL/6 mice were divided into diet‐induced obesity (DIO, n = 14) versus low‐fat diet (LFD, n = 14). After 3 months, 16‐week‐old mice were allocated to an exercise intervention (LFD‐E, DIO‐E) or a control group (LFD, DIO) for 6 weeks (4 groups, n = 7/group). Marrow adipocyte area was 44% higher with obesity (p < 0.0001) and after exercise 33% lower in LFD (p < 0.0001) and 39% lower in DIO (p < 0.0001). In LFD, exercise did not affect adipocyte number; however, in DIO, the adipocyte number was 56% lower (p < 0.0001). MAT was 44% higher in DIO measured by osmium‐μCT, whereas exercise associated with reduced MAT (–23% in LFD, –48% in DIO, p < 0.05). MAT was additionally quantified by 9.4TMRI, and correlated with osmium‐µCT (r = 0.645; p < 0.01). Consistent with higher lipid beta oxidation, perilipin 3 (PLIN3) rose with exercise in tibial mRNA (+92% in LFD, +60% in DIO, p < 0.05). Tibial µCT‐derived trabecular bone volume (BV/TV) was not influenced by DIO but responded to exercise with an increase of 19% (p < 0.001). DIO was associated with higher cortical periosteal and endosteal volumes of 15% (p = 0.012) and 35% (p < 0.01), respectively, but Ct.Ar/Tt.Ar was lower by 2.4% (p < 0.05). There was a trend for higher stiffness (N/m) in DIO, and exercise augmented this further. In conclusion, obesity associated with increases in marrow lipid—measured by osmium‐μCT and MRI—and partially due to an increase in adipocyte size, suggesting increased lipid uptake into preexisting adipocytes. Exercise associated with smaller adipocytes and less bone lipid, likely invoking increased ß‐oxidation and basal lipolysis as evidenced by higher levels of PLIN3. © 2017 American Society for Bone and Mineral Research.