Progression of multiple myeloma (MM) is largely dependent on the bone marrow (BM) microenvironment wherein communication through different factors including extracellular vesicles takes place. This cross-talk not only leads to drug resistance but also to the development of osteolysis. Targeting vesicle secretion could therefore simultaneously ameliorate drug response and bone disease. In this paper, we examined the effects of MM exosomes on different aspects of osteolysis using the 5TGM1 murine model. We found that 5TGM1 sEVs, or 'exosomes', not only enhanced osteoclast activity, they also blocked osteoblast differentiation and functionality in vitro. Mechanistically, we could demonstrate that transfer of DKK-1 led to a reduction in Runx2, Osterix, and Collagen 1A1 in osteoblasts. In vivo, we uncovered that 5TGM1 exosomes could induce osteolysis in a similar pattern as the MM cells themselves. Blocking exosome secretion using the sphingomyelinase inhibitor GW4869 not only increased cortical bone volume, but also it sensitized the myeloma cells to bortezomib, leading to a strong anti-tumor response when GW4869 and bortezomib were combined. Altogether, our results indicate an important role for exosomes in the BM microenvironment and suggest a novel therapeutic target for anti-myeloma therapy.