High aldehyde dehydrogenase (ALDH) activity has recently been used to identify tumorigenic cell fractions in many cancer types. Herein we hypothesized that a subpopulation of cells with cancer stem cells (CSCs) properties could be identified in established human osteosarcoma cell lines based on high ALDH activity. We previously showed that a subpopulation of cells with high ALDH activity were present in 4 selected human osteosarcoma cell lines, of which a significantly higher ALDH activity was present in the OS99-1 cell line that was originally derived from a highly aggressive primary human osteosarcoma. Using a xenograft model in which OS99-1 cells were grown in NOD/SCID mice, we identified a highly tumorigenic subpopulation of osteosarcoma cells based on their high ALDH activity. Cells with high ALDH activity (ALDHbr cells) from the OS99-1 xenografts were much less frequent, averaging 3% of the entire tumor population, compared to those isolated directly from the OS99-1 cell line. ALDHbr cells from the xenograft were enriched with greater tumorigenicity compared to their counterparts with low ALDH activity (ALDHlo cells), generating new tumors with as few as 100 cells in vivo. The highly tumorigenic ALDHbr cells illustrated the stem cell characteristics of self-renewal, the ability to produce differentiated progeny and increased expression of stem cell marker genes OCT3/4A, Nanog and Sox-2. The isolation of osteosarcoma CSCs by their high ALDH activity may provide new insight into the study of osteosarcoma-initiating cells and may potentially have therapeutic implications for human osteosarcoma.