Osteosarcoma (OS) is a malignant bone sarcoma characterized by a propensity for metastatic spread. Tmem41b is a multi-spanning membrane protein that acts as a novel autophagy-related (ATG) gene; however, its effect on the malignant phenotypes of tumor cells and the corresponding molecular details remains unknown. In the current study, RNA-sequencing, quantitative PCR (qPCR), and immunohistochemical analysis were conducted to prove Tmem41b upregulation in 103 OS tissue specimens and three OS cell lines (U-2OS, U87, and MG63). It was strongly correlated with tumor size (P < 0.01), metastases (P < 0.05), and recurrence (P < 0.05) as well as poor survival time in OS patients. Subsequently, gene set enrichment analysis (GSEA) of U-2OS cells with Tmem41b knockdown links cell receptor activation, proliferation, and invasion according to RNA-sequence, and PCNA, Cyclin D1, Cyclin E1, and MMP13 expression levels were decreased by western blotting assay. Furthermore, the suppressive effect of Tmem41b knockdown on cell proliferation and invasion was demonstrated in vitro and in vivo. Additionally, Tmem41b silencing could significantly inhibit the AKT and p38 signaling pathways. Last, MMP13 upregulation was positively correlated with Tmem41b expression and poor survival time in OS patients via analysis of immunohistochemical detection and bioinformatics. All together, these findings demonstrate the role of Tmem41b and MMP13 as a novel prognostic marker and an attractive therapeutic target for OS.