Background: The involvement of neutrophil-related genes (NRGs) in patients with osteosarcoma (OS) has not been adequately explored. In this study, we aimed to examine the association between NRGs and the prognosis as well as the tumor microenvironment of OS. Methods: The OS data were obtained from the TARGET-OS and GEO database. Initially, we extracted NRGs by intersecting 538 NRGs from single-cell RNA sequencing (scRNA-seq) data between aneuploid and diploid groups, as well as 161 up-regulated differentially expressed genes (DEGs) from the TARGET-OS datasets. Subsequently, we conducted Least Absolute Shrinkage and Selection Operator (Lasso) analyses to identify the hub genes for constructing the NRG-score and NRG-signature. To assess the prognostic value of the NRG signatures in OS, we performed Kaplan–Meier analysis and generated time-dependent receiver operating characteristic (ROC) curves. Gene enrichment analysis (GSEA) and gene set variation analysis (GSVA) were utilized to ascertain the presence of tumor immune microenvironments (TIMEs) and immunomodulators (IMs). Additionally, the KEGG neutrophil signaling pathway was evaluated using ssGSEA. Subsequently, PCR and IHC were conducted to validate the expression of hub genes and transcription factors (TFs) in K7M2-induced OS mice. Results: FCER1G and C3AR1 have been identified as prognostic biomarkers for overall survival. The findings indicate a significantly improved prognosis for OS patients. The effectiveness and precision of the NRG signature in prognosticating OS patients were validated through survival ROC curves and an external validation dataset. The results clearly demonstrate that patients with elevated NRG scores exhibit decreased levels of immunomodulators, stromal score, immune score, ESTIMATE score, and infiltrating immune cell populations. Furthermore, our findings substantiate the potential role of SPI1 as a transcription factor in the regulation of the two central genes involved in osteosarcoma development. Moreover, our analysis unveiled a significant correlation and activation of the KEGG neutrophil signaling pathway with FCER1G and C3AR1. Notably, PCR and IHC demonstrated a significantly higher expression of C3AR1, FCER1G, and SPI1 in Balb/c mice induced with K7M2. Conclusions: Our research emphasizes the significant contribution of neutrophils within the TIME of osteosarcoma. The newly developed NRG signature could serve as a good instrument for evaluating the prognosis and therapeutic approach for OS.