Autosomal dominant PDGFRβ gain-of-function mutations in mice and humans cause a spectrum of wasting and overgrowth disorders afflicting the skeleton and other connective tissues, but the cellular origin of these disorders remains unknown. We demonstrate that skeletal stem cells (SSCs) isolated from mice with a gain-of-function D849V point mutation in PDGFRβ exhibit colony formation defects that parallel the wasting or overgrowth phenotypes of the mice. Single-cell RNA transcriptomics with SSC-derived polyclonal colonies demonstrates alterations in osteogenic and chondrogenic precursors caused by PDGFRβD849V. Mutant cells undergo poor osteogenesis in vitro with increased expression of Sox9 and other chondrogenic markers. Mice with PDGFRβD849V exhibit osteopenia. Increased STAT5 phosphorylation and overexpression of Igf1 and Socs2 in PDGFRβD849V cells suggests that overgrowth in mice involves PDGFRβD849V activating the STAT5-IGF1 axis locally in the skeleton. Our study establishes that PDGFRβD849V causes osteopenic skeletal phenotypes that are associated with intrinsic changes in SSCs, promoting chondrogenesis over osteogenesis.