Osteosarcoma is the most common form of primary malignant bone tumor. The use of chemotherapy drugs with many side effects, including high-dose methotrexate, doxorubicin, cisplatin and ifosfamide, has greatly improved osteosarcoma survival compared with surgery alone. However, for 20 years, overall survival remained at a plateau of 60-70% in nonmetastatic disease and 20-30% in metastatic osteosarcoma owing to lung metastases. Liposomal muramyl tripeptide phosphatidyl ethanolamine (L-MTP-PE) is a new agent that improves overall osteosarcoma survival (chemotherapy without L-MTP-PE 70% versus with L-MTP-PE 78%; p = 0.03). L-MTP-PE offers additional benefit for osteosarcoma treatment in combination with chemotherapy, particularly ifosfamide-containing regimens. Clinical experience indicates that side effects such as fever are temporary and controlled or prevented with ibuprofen and/or acetoaminophen premedication; severe side effects are rare. Although surgery will remain the main approach for osteosarcoma treatment of lung metastases, L-MTP-PE combined with other modalities, including chemotherapy, appears to be of benefit in these patients as well.