lncRNA-X-inactive specific transcript (lncRNA XIST) has been demonstrated to be a tumor suppressor involved in the pathogenesis and development of various cancers. However, the function of XIST and its working mechanism in osteosarcoma (OS) remain enigmatic. Firstly, we determined the expression of XIST in OS tissues and cell lines by quantitative reverse transcription-PCR (qRT-PCR) and explored whether aberrant XIST expression was associated with recurrence and short overall survival. Furthermore, the effects of XIST on osteosarcoma cells were studied by lentivirus mediated overexpression approach in vitro and in vivo. Detection of a set of epithelial-mesenchymal transition (EMT) markers was performed to explore whether XIST is involved in EMT. Finally, we investigated the regulatory mechanism of XIST acting as a competitive endogenous RNA (ceRNA) of miR-21-5p in OS progression and metastasis. lncRNA XIST was significantly downregulated in osteosarcoma tissues and osteosarcoma cells, and associated with recurrence and short overall survival in OS patients. XIST overexpression remarkably inhibited the proliferation of OS cells as well as the xenograft tumor formation in vivo. Both cell invasion and migration were inhibited by XIST overexpression via suppressing the EMT process. These results indicated that XIST functioned as a tumor suppressor in OS. Moreover, we found that miR-21-5p interacted with XIST by directly targeting the miRNA-binding site in the XIST sequence, and qRT-PCR results showed XIST and miR-21-5p could affect each other's expression, respectively. The following assays verified that the tumor suppressor, PDCD4 was a functional target of miR-21-5p in OS cells. Finally, we affirmed that XIST regulated PDCD4 expression by competitively binding to miR-21-5p. XIST inhibited cell proliferation and cell mobility by competitively binding to miR-21-5p and upregulating PDCD4 in OS. Our study demonstrated that lncRNA-XIST, which acts as a miRNA sponge, impedes miR-21-5p to maintain the expression of PDCD4, which contributes to the progression of OS. Our findings suggest that the newly identified XIST/miR-21-5p/PDCD4 axis could be a potential biomarker or therapeutic target for OS.