Osteosarcoma serves as a prevalent bone cancer with a high metastasis and common drug resistance, resulting in poor prognosis and high mortality. Photodynamic therapy (PDT) is a patient-specific and non-invasive tumor therapy. Nanoparticles, like graphene oxide have been widely used in drug delivery and PDT. Ginsenoside Rg3 is a principal ginseng component and has presented significant anti-cancer activities. Here, we constructed the nanoparticles using GO linked with photosensitizer (PS) indocyanine green (ICG), folic acid, and polyethylene glycol (PEG), and loaded with Rg3 (PEG–GO–FA/ICG–Rg3). We aimed to explore the effect of PEG–GO–FA/ICG–Rg3 combined with PDT for the treatment of osteosarcoma. Significantly, we found that Rg3 repressed proliferation, invasion, and migration, and enhanced apoptosis and autophagy of osteosarcoma cells, while the PEG–GO–FA/ICG–Rg3 presented a higher activity, in which NIR laser co-treatment could remarkably increase the effect of PEG–GO–FA/ICG–Rg3. Meanwhile, stemness of osteosarcoma cell–derived cancer stem cells was inhibited by Rg3 and PEG–GO–FA/ICG–Rg3, and the combination of PEG–GO–FA/ICG–Rg3 with NIR laser further significantly attenuated this phenotype in the system. Moreover, NIR laser notably improved the inhibitor effect of PEG–GO–FA/ICG–Rg3 on the tumor growth of osteosarcoma cells in vivo. Consequently, we concluded that PEG–GO–FA/ICG–Rg3 improved PDT in inhibiting malignant progression and stemness of osteosarcoma cell. Our finding provides a promising and practical therapeutic strategy for the combined treatment of osteosarcoma.