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B7 homolog 3 protein (B7-H3), a member of the B7 checkpoint family, is aberrantly and consistently expressed on the membranes of various human cancer cells and is associated with poor prognosis. Emerging evidence also indicates that soluble B7-H3 (sB7-H3) correlates with adverse outcomes in multiple malignancies. In this study, we measured sB7-H3 levels in peripheral blood using an enzyme-linked immunosorbent assay (ELISA) from 100 newly diagnosed osteosarcoma (OTS) patients, both before and after neoadjuvant chemotherapy, and simultaneously assessed B7-H3 tissue expression via immunohistochemistry (IHC) analysis of surgical specimens. Our analysis showed significant associations between B7-H3 tissue expression and histopathological response to chemotherapy, with the H-score threshold > 75 identifying patients with particularly poor prognosis (p < 0.05). Although no significant correlation was observed between tissue and circulating B7-H3 expression, we found that lower baseline sB7-H3 levels (pre-sB7H3 < 21.2425 ng/mL) predicted poor clinical outcomes. By integrating sB7-H3 levels with established prognostic indicators, including metastatic status and lactate dehydrogenase (LDH) levels, we developed a comprehensive prognostic model that demonstrated strong predictive accuracy for survival outcomes. Notably, pre-sB7-H3 levels were significantly associated with good histological responses (p < 0.05). Longitudinal monitoring during treatment revealed that dynamic changes in sB7-H3 levels positively correlated with disease progression (p < 0.05) and inversely correlated with good histological responses (p < 0.05). These findings highlight serum sB7-H3 as a clinically valuable biomarker in OTS, providing prognostic information both at diagnosis and throughout the course of treatment in a relatively convenient manner.