Immune-related genes (IRGs) are responsible for osteosarcoma (OS) initiation and development. We aimed to develop an optimal IRGs-based signature to assess of OS prognosis. Sample gene expression profiles and clinical information were downloaded from the Therapeutically Applicable Research to Generate Effective Treatments (TARGET) and Genotype-Tissue Expression (GTEx) databases. IRGs were obtained from the ImmPort database. R software was used to screen differentially expressed IRGs (DEIRGs) and functional correlation analysis. DEIRGs were analyzed by univariate Cox regression and iterative LASSO Cox regression analysis to develop an optimal prognostic signature, and the signature was further verified by independent cohort (GSE39055) and clinical correlation analysis. The analyses yielded 604 DEIRGs and 10 hub IRGs. A prognostic signature consisting of 13 IRGs was constructed, which strikingly correlated with OS overall survival and distant metastasis (p < 0.05, p < 0.01), and clinical subgroup showed that the signature's prognostic ability was independent of clinicopathological factors. Univariate and multivariate Cox regression analyses also supported its prognostic value. In conclusion, we developed an IRGs signature that is a prognostic indicator in OS patients, and the signature might serve as potential prognostic indicator to identify outcome of OS and facilitate personalized management of the high-risk patients.