The chronic use of glucocorticoids decreases bone mass and quality and increases bone-marrow adiposity, but the underlying mechanisms remain unclear. Here, we show that bone-marrow adipocyte (BMAd) lineage cells in adult mice undergo rapid cellular senescence upon glucocorticoid treatment. The senescent BMAds acquire a senescence-associated secretory phenotype, which spreads senescence in bone and bone marrow. Mechanistically, glucocorticoids increase the synthesis of oxylipins, such as 15d-PGJ2, for peroxisome proliferator-activated receptor gamma (PPARγ) activation. PPARγ stimulates the expression of key senescence genes and also promotes oxylipin synthesis in BMAds, forming a positive feedback loop. Transplanting senescent BMAds into the bone marrow of healthy mice is sufficient to induce the secondary spread of senescent cells and bone-loss phenotypes, whereas transplanting BMAds harboring a p16INK4a deletion did not show such effects. Thus, glucocorticoid treatment induces a lipid metabolic circuit that robustly triggers the senescence of BMAd lineage cells that, in turn, act as the mediators of glucocorticoid-induced bone deterioration.