The records of 226 patients (sixty-seven who were managed at our institution and 159 who were identified from the consultation files) who had had a parosteal osteosarcoma were reviewed. The criteria for diagnosis were that, roentgenographically, the lesion had arisen from the surface of the bone and that, histologically, the tumor was well differentiated (Grade 1 or 2); it was characterized by well formed osteoid within a spindle-cell stroma; and, when there was medullary involvement, less than 25 per cent of the medullary cavity was affected. Dedifferentiation was more common (16 per cent of the patients) than previously reported and was associated with a poor prognosis. Cross-sectional imaging studies demonstrated medullary involvement in 22 per cent of the patients, an unmineralized soft-tissue mass peripheral to the mineral component in 51 per cent, and adjacent soft-tissue invasion in 46 per cent. In contrast to the findings in our previous studies, medullary involvement was not a poor prognostic factor. At an average of thirteen years (range, two to forty-one years), eleven of the sixty-seven patients who were managed at our institution died of the tumor; ten of these patients had a dedifferentiated tumor. Statistical analysis of the thirty-nine patients who had had the primary treatment at our institution revealed that incomplete resection was associated with an increased risk of local recurrence and that dedifferentiation markedly increased the risk of metastasis.