ABSTRACT: Osteosarcoma (OS) is a primary and highly malignant mesenchymal tissue tumor. The specific pathological mechanism underlying disease initiation or progression remains unclear. Circular RNAs (circRNAs) are a type of covalently circular RNA with a head-to-tail junction site. In this study, we aimed to investigate the sponging mechanism between circRNAs and microRNAs (miRNAs) in OS. Based on the inhibited effect of miR-16-5p reported on OS, circUSP34 was analyzed as a sponge of miR-16-5p via Starbase. We found that circUSP34 promoted the proliferation, migration, and invasion of OS in vitro and in vivo. circUSP34 increased but miR-16-5p decreased in OS by qRT-PCR. Function assays showed that the malignancy of OS cells, including proliferation, migration, and invasion, was inhibited after knocking out circUSP34. Western blotting results showed that the expression level of vimentin and Ki-67 decreased. Similarly, miR-16-5p mimic compromised the proliferation, migration, and invasion of OS cells. FISH assay results indicated that circUSP34 and miR-16-5p were colocalized in the cytoplasm. The sponging mechanism of circUSP34 and miR-16-5p was verified by dual-luciferase reporter assay, RNA immunoprecipitation (RIP), and RNA pull down assays. Interestingly, the miR-16-5p inhibitor partly reversed the inhibitory effect of sh-circUSP34 on the malignancy of OS cells. Further, mice tumors for IHC indicated that vimentin, N-cadherin, and Ki-67 protein expression decreased, but E-cadherin protein expression increased. Collectively, circUSP34 promoted OS malignancy, including proliferation, migration, and invasion, by sponging miR-16-5p. It can serve as a potential therapeutic target and biomarker.