Current treatment of osteosarcoma produces disappointing outcomes, and innovative therapies must be investigated. We have used retroviral vectors to transfer the herpes simplex virus thymidine kinase (HSVtk) and interleukin-2 genes to human osteosarcoma cells. Each gene was stably transduced and expressed; the HSVtk gene effectively conferred ganciclovir (GCV) susceptibility to transduced cells. A strong bystander effect was observed in vitro, whereby nontransduced tumor cells in proximity to transduced cells acquired susceptibility to GCV killing. Human osteosarcoma cells were used to develop a series of experiments in athymic nude mice to treat experimental osteosarcoma. Subcutaneously implanted mixtures of tumor cells and HSVtk vector producer cells developed into tumors that completely regressed upon administration of GCV. Subcutaneously implanted mixtures of transduced and wild-type cells showed a potent bystander effect upon administration of GCV, with complete tumor ablation when as little as 10% of the cells were HSVtk+. A significant (P < .05) antitumoral response was seen against primary tumors composed of unmodified cells when a secondary tumor of transduced cells was implanted at a distance of 1 cm, suggesting a diffusible bystander factor. The presence of interleukin-2-transduced cells improved the efficacy of treatment. A significant (P < .03) antitumoral response was seen in the treatment of established osteosarcomas by the injection of HSVtk vector producer cells.