Background: Osteoblastoma and osteosarcoma are primary bone forming tumors that show different clinical behavior and radiological/pathological features. In the majority of cases the two entities may easily be separated. Occasionally, however osteoblastoma may resemble osteosarcoma histologically, and the differential diagnosis between aggressive osteoblastoma and low grade osteosarcoma may be very difficult or even impossible on a small biopsy sample. Aims: To study Ki-67 and COX-2 immunoexpression in osteoblastomas and osteosarcomas, and to assess their utility in differentiating the two tumors. Methods: Proliferation index as assessed by Ki-67-LI and COX-2 immunoexpression were studied in 9 osteoblastomas and 30 osteosarcomas (20 high grade and 10 low grade), including 27 osteoblastic osteosarcomas. Results: There was gradual significant increase (p<0.01) in Ki-67-LI from osteoblastomas, low grade osteosarcomas, to high grade osteosarcomas. COX-2 expression was significantly higher (p<0.002) in osteoblastomas (100%) than in osteosarcomas. There was marked significant decrease (p<0.001) in COX-2 immunostaining in low grade osteosarcomas compared to osteoblastomas. However, there was significant increase (p<0.01) in COX-2 immunostaining in high grade osteosarcomas than in low grade osteoblastic osteosarcomas. There was significant increase in Ki-67-LI and decrease in COX-2 expression in low grade osteosarcoma compared to aggressive osteoblastoma (p<0.001 & p<0.01 respectively). Conclusion: Ki-67 increased ongoing from osteoblastomas through low grade osteosarcomas, to high grade osteosarcomas. Negative COX-2 in low grade osteoblastic osteosarcomas could differentiate it from aggressive osteoblastomas which is always COX-2 positive. Positivity of COX-2 in osteosarcomas starts with increasing grade which is closely correlated with higher stages and poor prognosis.