The functional results of prostheses and osteoarticular grafts for osteosarcoma around the knee joint are not satisfactory because of poor durability and gross distortion of the normal anatomy. We have investigated the functional outcome of intentional marginal excision for osteosarcoma around the knee joint in conjunction with caffeine-potentiated chemotherapy. Twenty-one patients with AJCC stage IIB high-grade osteosarcoma around the knee joint were given three to five preoperative courses of intra-arterial cisplatin and caffeine with or without doxorubicin. The histological response in these 21 patients to preoperative chemotherapy was grade IV (no viable cells) in 19 patients and grade III (only scattered foci of viable cells) in 2. The patients were separated into three groups on the basis of patterns of tumour excision. The first group underwent marginal excision of the proximal fibula, the second underwent epiphysis preservation followed by distraction osteogenesis, and the third underwent joint resection and reconstruction. The mean functional evaluations were 100, 95, and 88%, respectively. No local tumour recurrence was seen at mean follow-up of 97 months. Marginal excision of the proximal fibula resulted in excellent function. Preservation of the epiphysis leads to better function than joint resection.