Hematopoietic stem cell (HSC) transplantation represents a curative treatment for various hematological disorders. However, delayed reconstitution of innate and adaptive immunity often causes fatal complications. HSC maintenance and lineage differentiation are supported by stromal niches, and we now find that bone marrow stroma cells (BMSCs) are severely and permanently damaged by the pre-conditioning irradiation required for efficient HSC transplantation. Using mouse models, we show that stromal insufficiency limits the number of donor-derived HSCs and B lymphopoiesis. Intra-bone transplantation of primary, but not cultured, BMSCs quantitatively reconstitutes stroma function in vivo, which is mediated by a multipotent NT5E(+) (CD73)(+) ENG(-) (CD105)(-) LY6A(+) (SCA1)(+) BMSC subpopulation. BMSC co-transplantation doubles the number of functional, donor-derived HSCs and significantly reduces clinically relevant side effects associated with HSC transplantation including neutropenia and humoral immunodeficiency. These data demonstrate the potential of stroma recovery to improve HSC transplantation.