Osteosarcoma is the most common malignant bone tumour, with a peak incidence in children and young adolescents, suggesting a role of rapid bone growth in its pathogenesis. The Wnt/beta-catenin pathway plays a crucial role in skeletal development and is indispensable for osteoblasts' lineage determination. Previous studies suggesting an oncogenic role for the Wnt/beta-catenin pathway in osteosarcoma were based on cytoplasmic staining of beta-catenin or the detection of one component of this pathway. However, those approaches are inappropriate to address whether the Wnt/beta-catenin pathway is functionally active. Therefore, in this study, we examined nuclear beta-catenin expression in 52 human osteosarcoma biopsies, 15 osteoblastomas (benign bone tumours), and four human osteosarcoma cell lines by immunohistochemistry. Furthermore, we modulated Wnt/beta-catenin pathway activity using a GIN (GSK3beta inhibitor) and evaluated its effect on cell growth and osteogenic differentiation. Absence of nuclear beta-catenin staining was found in 90% of the biopsies and all osteosarcoma cell lines, whereas strong nuclear beta-catenin staining was observed in all osteoblastomas. Wnt-luciferase activity was comparable to the negative control in all osteosarcoma cell lines. GIN stimulated the Wnt/beta-catenin pathway, as shown by translocation of beta-catenin into the nucleus and increased Wnt-luciferase activity as well as mRNA expression of AXIN2, a specific downstream target gene. Stimulation of the Wnt/beta-catenin pathway by GIN significantly reduced cell proliferation in the cell lines MG-63 and U-2-OS and enhanced differentiation in the cell lines HOS and SJSA-1, as shown by an increase in alkaline phosphatase (ALP) activity and mineralization. In contrast with the oncogenic role of the Wnt/beta-catenin pathway in osteosarcoma as previous studies suggested, here we demonstrate that this pathway is inactivated in osteosarcoma. Moreover, activation of the Wnt/beta-catenin pathway inhibits cell proliferation or promotes osteogenic differentiation in osteosarcoma cell lines. Our data suggest that loss of Wnt/beta-catenin pathway activity, which is required for osteoblast differentiation, may contribute to osteosarcoma development.