Mesenchymal stromal cells (MSCs) are multipotent progenitor cells and there is much interest in how MSCs contribute to the regulation of the tumor microenvironment. Whether MSCs exert a supportive or suppressive effect on tumor progression is still controversial, but is likely dependent on a variety of factors that are tumor-type dependent. Multiple myeloma (MM) is characterized by growth of malignant plasma cells in the bone marrow. It has been shown that the progression of MM is governed by MSCs, which act as a stroma of the myeloma cells. Although stroma is created via mutual communication between myeloma cells and MSCs, the mechanism is poorly understood. Here we explored the role of lysophosphatidic acid (LPA) signaling in cellular events where MSCs were converted into either MM-supportive or MM-suppressive stroma. We found that myeloma cells stimulate MSCs to produce autotaxin, an indispensable enzyme for the biosynthesis of LPA, and LPA receptor 1 (LPA1) and 3 (LPA3) transduce opposite signals to MSCs to determine the fate of MSCs. LPA3-silenced MSCs (siLPA3-MSCs) exhibited cellular senescence-related phenotypes in vitro, and significantly promoted progression of MM and tumor-related angiogenesis in vivo. In contrast, siLPA1-MSCs showed resistance to cellular senescence in vitro, and efficiently delayed progression of MM and tumor-related angiogenesis in vivo. Consistently, anti-MM effects obtained by LPA1-silencing in MSCs were completely reproduced by systemic administration of Ki6425, an LPA1 antagonist. Collectively, our results indicate that LPA signaling determines the fate of MSCs and has potential as a therapeutic target in MM. Stem Cells 2017;35:739-753.