The major objective of this proposal is to determine the efficacy of combining liposomal MTP-PE (L-MTP-PE), a monocyte/macrophage activator, with Ifosfamide (IFX) for the treatment of relapsed osteosarcoma (OS) patients. Evaluating the tolerability of this combination therapy and its impact on immune stimulation are also major goals. Relapsed OS has a poor prognosis. Recurrence rates are 80% within 1 year. Salvage chemotherapy has had little effect on the recurrence rate. Our previous phase II L-MTP-PE study demonstrated efficacy with 24 weeks of therapy. Biologic activity was demonstrated by increases in monocyte cytotoxicity and plasma TNF, IL-6, neopterin, and CRP. The present proposal is to employ L-MTP-PE together with IFX. While objective responses have been demonstrated with IFX, these responses are not durable. Our goal is to activate the body's monocytes and pulmonary macrophages to eradicate the residual tumor cells not killed by IFX. This study will provide supportive evidence that L-MTP-PE can and should be employed together with chemotherapy. Patients may be enrolled either with measurable disease that is resectable (Stratum B) or after being rendered NED by surgery (Stratum A). Patients who are NED will receive 8 courses of IFX with L-MTP-PE and evaluated for time to recurrence as done in the previous L-MTP-PE study. Those in Stratum B will be evaluated for objective tumor response as well as time to recurrence. Three courses of IFX with L-MTP-PE will be administered prior to surgery. Resected tumors will be examined for the histological characteristics of peripheral fibrosis and inflammatory cell infiltration seen following L-MTP-PE therapy in our previous study. Patients will then receive an additional 5 courses of IFX plus L-MTP-PE postoperatively. Relapse rates will be compared to historical controls. Plasma IL-1, TNF, IL-6, IL-2, IFN-gamma, neopterin and CRP will be monitored and compared to those obtained when L-MTP-PE was administered alone. These studies will provide in vivo data to confirm the hypothesis that chemotherapy does not interfere with L-MTP-PE's immune activation. We will also investigate the mechanism of action of L-MTP-PE using normal human monocytes. Enhanced expression of IL-1alpha, IL-1beta, TNF and IL-6 mRNA with secretion of the cytokines was demonstrated with monocytes incubated with L-MTP-PE. We will now determine whether this is due to increased transcription or secondary to post transcriptional mechanisms. The proposed clinical and laboratory studies should provide information to justify a randomized phase III trial in OS using L-MTP-PE in combination with chemotherapy.