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Studies of osteosarcoma cell lines or frozen tissue have detected loss of heterozygosity (LOH) at the retinoblastoma (RB) locus by Southern blot analysis or restriction fragment length polymorphism. Most archived clinical specimens cannot be analyzed by these techniques. We analyzed formalin-fixed, paraffin-embedded samples from 19 cases of osteosarcoma for molecular changes at the RB locus using polymerase chain reaction amplification of polymorphic short tandem repeat sequences (microsatellite repeats). Four repeat sequences, two within and two flanking the RB gene, were analyzed. Fourteen of 18 informative cases (78%) showed molecular changes at the RB locus. LOH was identified in 13 cases (72%). Unexpectedly, microsatellite instability (MI) was found in eight cases (44%). All of the cases of MI involved alterations of more than one repeat unit, and six of eight were associated with LOH. LOH was identified at three unlinked loci in one case and at a single locus in another. Microsatellite analysis of archival tissue yields prevalence rates of LOH comparable to those found by other methods and has the added advantage of showing MI. The ability to use formalin-fixed, paraffin-embedded tissue extends genetic analysis to routinely processed surgical material and may permit molecular confirmation of challenging cases of osteosarcoma.