The pseudoreceptor BAMBI (bone morphogenetic protein and activin membrane-bound inhibitor), formerly known as NMA, is an inhibitor of the TGF-β signaling pathway. BAMBI exhibits structural homology to TGF-βRI but lacks an intracellular kinase domain. In most of the high-grade carcinomas, the degree of BAMBI expression is abnormally increased, which leads to the proliferation and metastasis of tumor cells. Recent studies have reported that BAMBI is involved in the Wnt-β-catenin pathway that regulates the proliferation and metastasis of tumor cells. However, little is known about the role of BAMBI and β-catenin in human osteosarcoma. Given the above background, we examined the role of BAMBI in the pathophysiology of osteosarcoma. Using immunohistochemical staining and western blot analysis, the degree of the expression of BAMBI and β-catenin was significantly higher in osteosarcoma specimens compared with normal tissues. With the overexpression of BAMBI, mediated by adenovirus, the degree of invasion and migration was significantly increased and the proliferation of U2-OS osteosarcoma cells was stimulated. Transwell analysis showed that BAMBI increased the invasion of osteosarcoma cells and upregulated the secretion of matrix metalloproteinases (MMPs), which was demonstrated by gelatin zymography. Fluorescence-activated cell sorting (FACS) analysis showed a significant arrest in cell cycle progression at G0/G1 in osteosarcoma cells transfected with siRNA targeting BAMBI. With the overexpression of BAMBI, mediated by the adenovirus, however, there was a decrease in the number of cells at G0/G1. Consistent with the findings that cell growth was increased, BAMBI promoted the transition from G0/G1 to G2/M in the osteosarcoma cells. Our results suggest that BAMBI plays a key role in the pathogenesis and progression of osteosarcoma by regulating the expression of β-catenin and other signaling molecules via the pathways involved in the regulation of the cell cycle. This relationship between BAMBI and its involvement in the regulation of the cell cycle would provide a possibility that the BAMBI may be a new target for gene therapy.