Growing evidence suggests that circular RNAs (circRNAs) play a significant role in regulating cancer initiation and metastasis. Osteosarcoma (OS) is a sophisticated disease with various genes activated or silenced. In this study, we defined a novel cancer‐related circRNA, circ_0000502 in OS progression. qRT‐PCR was conducted to detect its expression level in OS tissue samples and cell lines. In addition, the clinical significance of circ_0000502 was investigated. Afterwards, gain‐of‐function and loss‐of‐function in vitro assays were performed to detect the cell growth, apoptosis, migration, and invasion altered by circ_0000502 by CCK‐8, clone‐forming, flow cytometry, and transwell experiments. Xenograft study was performed to validate the in vitro data. The luciferase reporter assay was used to explore the mechanism of circ_0000502. Circ_0000502 was identified upregulated in both OS tissue specimens and cells. In addition, its expression predicts clinical severity and unfavorable prognosis in the 63 recruited patients with OS. Circ_0000502 facilitated cell proliferation, migration, and invasion in OS cells and inhibited cell apoptosis. The animal study further confirmed the in vitro results. For mechanism exploration, circ_0000502 could directly sponge microRNA (miR)‐1238, and the oncogenic functions of circ_0000502 is partially dependent on its regulation of miR‐1238 proved by rescue assays. In summary, this study might help to develop rational predictive and therapeutic target for patients with OS.