The outcomes of adolescents/young adults with osteosarcoma have not improved in decades. The chaotic karyotype of this rare tumor has precluded the identification of prognostic biomarkers and patient stratification. We reasoned that transcriptomic studies should overcome this genetic complexity. RNA sequencing (RNA-seq) of 79 osteosarcoma diagnostic biopsies identified stable independent components that recapitulate the tumor and microenvironment cell composition. Unsupervised classification of the independent components stratified this cohort into favorable (G1) and unfavorable (G2) prognostic tumors in terms of overall survival. Multivariate survival analysis ranked this stratification as the most influential variable. Functional characterization associated G1 tumors with innate immunity and G2 tumors with angiogenic, osteoclastic, and adipogenic activities as well as PPARγ pathway upregulation. A focused gene signature that predicted G1/G2 tumors from RNA-seq data was developed and validated within an independent cohort of 82 osteosarcomas. This signature was further validated with a custom NanoString panel in 96 additional osteosarcomas. This study thus proposes new biomarkers to detect high-risk patients and new therapeutic options for osteosarcoma. These findings indicate that the osteosarcoma microenvironment composition is a major feature to identify hard-to-treat patient tumors at diagnosis and define the biological pathways and potential actionable targets associated with these tumors.