Telangiectatic osteosarcoma is a rare and special variant of osteogenic sarcoma with distinct radiologic, gross and microscopic features. This tumor is predominantly lytic, destructive tumor without sclerosis on roentgenogram, and is soft and cystic on gross examination. Histologically aneurysmally dilated spaces lined or traversed by stromal cells producing osteoid are noted. This report concerns a case of telangiectatic osteosarcoma occurring in a 7 years old boy. He presented with pathologic fracture of the right distal tibia, followed by a purely lytic lesion on X-ray examination. This lesion recurred five times during a span of one year. Microscopic features of the biopsy specimen was difficult to differentiate from aneurysmal bone cyst because of prominant blood-filled cyst formation. It was finally identified as osteosarcoma from the below-knee amputation specimen through the close examination for anaplastic osteoid-producing stromal cells in the septa that separate the blood cysts.