Caveolin-1 (Cav-1) is highly expressed in normal osteoblasts. This article reports that Cav-1 down-regulation is part of osteoblast transformation and osteosarcoma progression and validates its role as oncosuppressor in human osteosarcoma. A survey of 6-year follow-up indicates a better overall survival for osteosarcoma expressing a level of Cav-1 similar to osteoblasts. However, the majority of primary osteosarcoma shows significantly lower levels of Cav-1 than normal osteoblasts. Accordingly, Met-induced osteoblast transformation is associated with Cav-1 down-regulation. In vitro, osteosarcoma cell lines forced to overexpress Cav-1 show reduced malignancy with inhibited anchorage-independent growth, migration, and invasion. In vivo, Cav-1 overexpression abrogates the metastatic ability of osteosarcoma cells. c-Src and c-Met tyrosine kinases, which are activated in osteosarcoma, colocalize with Cav-1 and are inhibited on Cav-1 overexpression. Thus, Cav-1 behaves as an oncosuppressor in osteosarcoma. Altogether, data suggest that Cav-1 down-modulation might function as a permissive mechanism, which, by unleashing c-Src and Met signaling, enables osteosarcoma cells to invade neighboring tissues. These data strengthen the rationale to target c-Src family kinases and/or Met receptor to improve the extremely poor prognosis of metastatic osteosarcoma.