Melatonin (MLT) plays a role in preserving bone health, a function that may depend on homeostatic effects on both mature osteoblasts and mesenchymal stem cells (MSCs) of the bone tissue. In this study, these functions of MLT have been investigated in rat bone (femur) and in human adipose MSC (hMSC) during chronic exposure to low-grade cadmium (Cd) toxicity, a serious public health concern. The in vivo findings demonstrate that MLT protects against Cd-induced bone metabolism disruption and accumulation of bone marrow adipocytes, a cue of impaired osteogenic potential of skeletal MSC niches. This latter symptom was recapitulated in hMSCs in which Cd toxicity stimulated adipogenic differentiation. MLT was found to rescue, at least in part, the osteogenic differentiation properties of these cells. This study reports on a new bone cytoprotection function of MLT pertinent to Cd toxicity and its interfering effect on skeletal MSC differentiation properties that is worth investigating for its possible impact on human bone pathophysiology.