To understand the molecular etiology of osteosarcoma, we isolated and characterized a human osteosarcoma cell line (OS1). OS1 cells have high osteogenic potential in differentiation induction media. Molecular analysis reveals OS1 cells express the pocket protein pRB and the runt-related transcription factor Runx2. Strikingly, Runx2 is expressed at higher levels in OS1 cells than in human fetal osteoblasts. Both pRB and Runx2 have growth suppressive potential in osteoblasts and are key factors controlling competency for osteoblast differentiation. The high levels of Runx2 clearly suggest osteosarcomas may form from committed osteoblasts that have bypassed growth restrictions normally imposed by Runx2. Interestingly, OS1 cells do not exhibit p53 expression and thus lack a functional p53/p21 DNA damage response pathway as has been observed for other osteosarcoma cell types. Absence of this pathway predicts genomic instability and/or vulnerability to secondary mutations that may counteract the anti-proliferative activity of Runx2 that is normally observed in osteoblasts. We conclude OS1 cells provide a valuable cell culture model to examine molecular events that are responsible for the pathologic conversion of phenotypically normal osteoblast precursors into osteosarcoma cells.