It has not been well studied which cells and related mechanisms contribute to endochondral ossification. Here, we fate mapped the leptin receptor-expressing (LepR+) mesenchymal stem cells (MSCs) in different embryonic and adult extremities using Lepr-cre; tdTomato mice and investigated the underling mechanism using Lepr-cre; Ppp2r1afl/fl mice. Tomato+ cells appear in the primary and secondary ossification centers and express the hypertrophic markers. Ppp2r1a deletion in LepR+ MSCs reduces the expression of Runx2, Osterix, alkaline phosphatase, collagen X, and MMP13, but increases that of the mature adipocyte marker perilipin, thereby reducing trabecular bone density and enhancing fat content. Mechanistically, PP2A dephosphorylates Runx2 and BRD4, thereby playing a major role in positively and negatively regulating osteogenesis and adipogenesis, respectively. Our data identify LepR+ MSC as the cell origin of endochondral ossification during embryonic and postnatal bone growth and suggest that PP2A is a therapeutic target in the treatment of dysregulated bone formation.