Extraskeletal osteosarcoma is a rare soft tissue neoplasm arising from mesenchymal elements with characteristic production of osteoid. These tumours are known to have high rate of distant metastasis and dismal prognosis. We present a rare case of extraskeletal osteosarcoma arising in medial aspect of knee joint with synchronous inguinal node and soft tissue metastasis. The patient was initially diagnosed as myositis ossificans at an outside institute and excised without prior imaging or biopsy. The patient presented to our hospital with recurrent lesion along with palpable inguinal lymph nodes and soft tissue metastasis in thigh. The patient underwent neoadjuvant chemotherapy and wide excision of the primary lesion, soft tissue metastasis and complete groin node dissection. We also discuss the importance of PET scan and intra-operative ultrasonography in the management of these lesions.