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Background: Osteosarcoma is the most common primary bone malignancy of adolescents and young adults. Methods: We analyzed liver X receptor α (LXRα) mRNA expression in 16 pairs of human osteosarcoma tissues and adjacent noncancerous tissues. Moreover, we investigated LXRα's potential role in regulating cell proliferation in Saos-2 and U2OS cells. Results: We found that activation of LXRα, a member of nuclear receptor, was able to inhibit cell proliferation in Saos-2 and U2OS cells. At the molecular level, our results further revealed that expression of tumor suppressor gene, FoxO1, was up-regulated by LXRα activation. LXRα activates FoxO1 transcription through a direct binding on its promoter region. Conclusion: LXRα acts as a tumor suppressor for osteosarcoma, which may offer a new way in molecular targeting cancer treatment.