Osteosarcoma is major cause of cancer-related death in the pediatric age group, and this is due to the development of pulmonary metastases that fail to be eradicated with current treatment regimes. Although there have been significant improvements in the long-term survival of such patients, 25-50% with initially non-metastatic disease, subsequently develop metastases and this remains the major cause of death for these patients. In this study, we report the multimodal activity of pigment epithelium-derived factor (PEDF) in inhibiting osteosarcoma growth, angiogenesis and metastasis. In vitro, we found that administration of recombinant PEDF (rPEDF) on two osteosarcoma cell lines (rat UMR 106-01 and human SaOS-2) significantly reduced tumor cell proliferation and increased apoptosis, as well as decreased cell invasion, angiogenesis, and increased adhesion to collagen type-1. Administration of rPEDF upregulated the mRNA expression of phenotypic osteoblast differentiation markers (ALP, pro-alpha(1) collagen and osteocalcin) in a pre-osteoblastic cell line, UMR 201, and also increased mineralized nodule formation in both UMR 106-01 and SaOS-2. In vivo, rPEDF dramatically suppressed primary osteosarcoma growth and the development of macroscopic pulmonary metastases in an orthotopic model of human osteosarcoma (SaOS-2). Interestingly, no activity was seen in tumors grown subcutaneously, suggesting a paracrine interaction between PEDF and the bone microenvironment. Preliminary pharmacoevaluation studies demonstrated rPEDF stability within media containing serum and osteosarcoma cells, and no gross systemic toxicity was observed in vivo with rPEDF administration. These results suggest that PEDF is emerging as an attractive and clinically appealing drug candidate for the treatment of osteosarcoma.