In a previous study, we developed fluorescence-guided surgery (FGS) for osteosarcoma using an orthotopic model with 143B human osteosarcoma cells expressing red fluorescent protein (RFP) implanted into the intramedullary cavity of the tibia in nude mice. The FGS-treated mice had a significantly higher disease-free survival (DFS) rate than the bright-light surgery (BLS). However, although FGS significantly reduced the recurrence of the primary tumor, it did not reduce lung metastasis. In the present study, we utilized the OBP-401 telomerase-dependent killer-reporter adenovirus, carrying green fluorescent protein (GFP), to label human osteosarcoma in situ in orthotopic mouse models. OBP-401-illuminated human osteosarcoma cell lines, 143B and MNNG/HOS cells in vitro and in vivo. OBP-401 tumor illumination enabled effective FGS of the 143B-derived orthotopic mouse model of human osteosarcoma model as well as FGS eradication of residual cancer cells after BLS. OBP-401-assisted FGS significantly inhibited local recurrence and lung metastasis after surgery, thereby prolonging DFS and overall survival (OS), achieving a very important improvement of therapeutic outcomes over our previously reported FGS study. These therapeutic benefits of FGS were demonstrated using a clinically-viable methodology of direct labeling of human osteosarcoma in situ with the OBP-401 killer-reporter adenovirus in contrast with previous reports, which used genetically engineered labeled cells or antibody-based fluorescent labels for FGS. © 2015 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. J Orthop Res 34:836–844, 2016.