Purpose: To determine whether the addition of ifosfamide and/or muramyl tripeptide (MTP) encapsulated in liposomes to cisplatin, doxorubicin, and high-dose methotrexate (HDMTX) could improve the probability for event-free survival (EFS) in newly diagnosed patients with osteosarcoma (OS). Patients and Methods: Six hundred seventy-seven patients with OS without clinically detectable metastatic disease were treated with one of four prospectively randomized treatments. All patients received identical cumulative doses of cisplatin, doxorubicin, and HDMTX and underwent definitive surgical resection of the primary tumor. Patients were randomly assigned to receive or not to receive ifosfamide and/or MTP in a 2 × 2 factorial design. The primary end point for analysis was EFS. Results: Patients treated with the standard arm of therapy had a 3-year EFS of 71%. We could not analyze the results by factorial design because we observed an interaction between the addition of ifosfamide and the addition of MTP. The addition of MTP to standard chemotherapy achieved a 3-year EFS rate of 68%. The addition of ifosfamide to standard chemotherapy achieved a 3-year EFS rate of 61%. The addition of both ifosfamide and MTP resulted in a 3-year EFS rate of 78%. Conclusion: The addition of ifosfamide in this dose schedule to standard chemotherapy did not enhance EFS. The addition of MTP to chemotherapy might improve EFS, but additional clinical and laboratory investigation will be necessary to explain the interaction between ifosfamide and MTP. © 2005 by American Society of Clinical Oncology.