Hematopoietic aging is marked by a loss of regenerative capacity and skewed differentiation from hematopoietic stem cells (HSC) leading to impaired blood production. Signals from the bone marrow (BM) niche tailor blood production, but the contribution of the old niche to hematopoietic aging remains unclear. Here, we characterize the inflammatory milieu that drives both niche and hematopoietic remodeling. We find decreased numbers and functionality of osteoprogenitors (OPr) at the endosteum and expansion of central marrow LepR+ mesenchymal stromal cells (MSC-L) associated with deterioration of the sinusoidal vasculature, which together create a degraded and inflamed old BM niche. Niche inflammation, in turn, drives chronic activation of emergency myelopoiesis pathways in old HSCs and multipotent progenitors (MPP), which promotes myeloid differentiation at the expense of lymphoid and erythroid commitment and hinders hematopoietic regeneration. Moreover, we show how production of IL-1 by the damaged endosteum acts in trans to drive the proinflammatory nature of the central marrow with damaging consequences for the old blood system. Remarkably, niche deterioration, HSC dysfunction, and defective regeneration can all be ameliorated by blocking IL-1 signaling. Our results demonstrate that targeting IL-1 as a key mediator of niche inflammation is a tractable strategy to improve blood production during aging