Osteosarcoma is the most frequent, nonhematopoietic, primary malignant tumor of bone. Histopathologically, osteosarcoma is characterized by complex mixtures of different cell types with bone formation. The role of environmental factors in the formation of such a complicated tissue structure as osteosarcoma remains to be elucidated. Here, a newly established murine osteosarcoma model was used to clarify the roles of environmental factors such as fibroblast growth factor-2 (Fgf2) or leukemia-inhibitory factor (Lif) in the maintenance of osteosarcoma cells in an immature state. These factors were highly expressed in tumor environmental stromal cells, rather than in osteosarcoma cells, and they potently suppressed osteogenic differentiation of osteosarcoma cells in vitro and in vivo. Further investigation revealed that the hyperactivation of extracellular signal-regulated kinase (Erk)1/2 induced by these factors affected in the process of osteosarcoma differentiation. In addition, Fgf2 enhanced both proliferation and migratory activity of osteosarcoma cells and modulated the sensitivity of cells to an anticancer drug. The results of the present study suggest that the histology of osteosarcoma tumors which consist of immature tumor cells and pathologic bone formations could be generated dependent on the distribution of such environmental factors. The combined blockade of the signaling pathways of several growth factors, including Fgf2, might be useful in controlling the aggressiveness of osteosarcoma.