Background: The presence of a pathologic fracture in an osteosarcoma has been considered a poor prognostic factor and an indication for immediate amputation. The purpose of the present study was to determine, in the current era of neoadjuvant chemotherapy, whether a pathologic fracture in an osteosarcoma has prognostic importance and whether limb salvage can be safely performed in such patients without compromising clinical outcome. Methods: In a cooperative effort of the Musculoskeletal Tumor Society, members from eight institutions provided retrospective data on fifty-two patients with osteosarcoma who had a pathologic fracture and on fifty-five patients with osteosarcoma who had not had a pathologic fracture and had been followed for at least two years or until disease recurrence, metastasis, or death. The two groups were matched for patient age and tumor location. Outcomes examined were survival and local recurrence. A subgroup analysis was performed to assess differences in outcome within the group with the pathologic fracture. Results: The five-year estimated survival rates were 55% for the group with a pathologic fracture and 77% for the group without a fracture (p = 0.02). The rate of survival without a local recurrence at five years was 75% for the group with a fracture and 96% for the group without a fracture (p = 0.007). In the group with a fracture, seven (23%) of the thirty patients managed with limb salvage and four (18%) of the twenty-two managed with an amputation had a local recurrence (p = 0.75). Eleven (37%) of the thirty patients with a fracture who were managed with limb salvage and ten (45%) of the twenty-two patients with a fracture who were managed with an amputation died of the disease (p = 0.50). Five patients underwent open reduction and internal fixation followed by limb-salvage surgery. Two of them had a local recurrence and died at an average of eight months postoperatively. The remaining three patients were alive at an average of 6.1 years postoperatively. Local disease control and the survival of these patients were not significantly different from those for the thirty-three patients who were treated with nonoperative immobilization of the fracture followed by limb-salvage surgery. Conclusions: Patients with osteosarcoma who present with a pathologic fracture or sustain one during preoperative chemotherapy have an increased risk of local recurrence and a decreased rate of survival compared with patients who have not sustained a pathologic fracture. The performance of a limb-salvage procedure in carefully selected patients with a pathologic fracture does not significantly increase the risk of local recurrence or death. Factors predictive of improved outcome, such as the response to chemotherapy and union of the fracture, should be taken into account when limb salvage is being considered.