Over the last two or three decades, the pace of development of treatments for osteosarcoma tends has been slow. Novel effective therapies for osteosarcoma are still lacking. Previously, we reported that tumor-suppressing STF cDNA 3 (TSSC3) functions as an imprinted tumor suppressor gene in osteosarcoma; however, the underlying mechanism by which TSSC3 suppresses the tumorigenesis and metastasis remain unclear. We investigated the dynamic expression patterns of TSSC3 and autophagy-related proteins (autophagy related 5 (ATG5) and P62) in 33 human benign bone tumors and 58 osteosarcoma tissues using immunohistochemistry. We further investigated the correlations between TSSC3 and autophagy in osteosarcoma using western blotting and transmission electronic microscopy. CCK-8, Edu, and clone formation assays; wound healing and Transwell assays; PCR; immunohistochemistry; immunofluorescence; and western blotting were used to investigated the responses in TSSC3-overexpressing osteosarcoma cell lines, and in xenografts and metastasis in vivo models, with or without autophagy deficiency caused by chloroquine or ATG5 silencing. We found that ATG5 expression correlated positively with TSSC3 expression in human osteosarcoma tissues. We demonstrated that TSSC3 was an independent prognostic marker for overall survival in osteosarcoma, and positive ATG5 expression associated with positive TSSC3 expression suggested a favorable prognosis for patients. Then, we showed that TSSC3 overexpression enhanced autophagy via inactivating the Src-mediated PI3K/Akt/mTOR pathway in osteosarcoma. Further results suggested autophagy contributed to TSSC3-induced suppression of tumorigenesis and metastasis in osteosarcoma in vitro and in vivo models. Our findings highlighted, for the first time, the importance of autophagy as an underlying mechanism in TSSC3-induced antitumor effects in osteosarcoma. We also revealed that TSSC3-associated positive ATG5 expression might be a potential predictor of favorable prognosis in patients with osteosarcoma.