Background/Aims: Osteosarcoma (OS) is a primary malignant bone tumor in humans, and is notorious mainly for its distal metastases. We have recently shown that Shikonin, an effective constituent extracted from Chinese medicinal herb, inhibits OS cell invasion through suppression of matrix metalloproteinase 13 (MMP13). However, the underlying mechanisms remain unknown. Methods: Here, we studied the levels of tumor necrosis factor (TNF)-alpha-induced protein 8-like 2 (TIPE2) in OS cells upon Shikonin treatment. TIPE2 levels were adapted in OS cell lines through transfection with plasmids carrying transgene or short-hairpin interference RNA (shRNA), and the effects of TIPE2 adaptation on MMP13 and cell invasiveness were evaluated by RT-qPCR, Western blot, ELISA and transwell cell migration assay, respectively. TIPE2 levels in OS specimens from patients were examined and correlated with cancer metastases and patient survival. Results: We found that Shikonin dose-dependently decreased MMP13 levels, and increased TIPE2 levels in two OS cell lines, U2OS and SaOS-2. Overexpression of TIPE2 in U2OS significantly suppressed MMP13 levels and cell invasiveness. Depletion of TIPE2 in SaOS-2 cells significantly increased MMP13 levels and cell invasiveness. Moreover, TIPE2 levels in OS specimens were significantly decreased, compared to adjacent non-cancer bone tissue. Lower TIPE2 levels correlated with higher incidence of metastases and worse 5-year survival. Conclusion: TIPE2 mediates the suppressive effects of Shikonin on MMP13 in osteosarcoma cells, and TIPE2 may be a novel therapeutic target for OS.