Anoctamin 5 (ANO5) is a member of the Anoctamin (ANO) family of calcium-activated chloride channels. Although ANO5 expression is upregulated in various cancers, its role in osteosarcoma remains largely unknown. In this study, bioinformatics analysis, western blot, and immunohistochemical staining revealed that ANO5 was upregulated in osteosarcoma cell lines and osteosarcoma tissues, and ANO5 expression was positively associated with tumor size, tumor grade, and metastasis. Functional experiments demonstrated that inhibition of ANO5 decreased, while ANO5 overexpression increased, osteosarcoma cell proliferation and mobility in vitro. Immunoprecipitation, western blot, and confocal microscopy experiments showed that ANO5 bound to and promoted the degradation of Nel-like proteins 1 (NELL1) and 2 (NELL2). Moreover, a subcutaneous tumor transplantation model revealed that ANO5 knockdown reduced osteosarcoma cell proliferation and increased NELL1 and NELL2 expression in vivo. Finally, rescue experiments showed that knockdown of NELL1 or NELL2 reversed the inhibitory effects of ANO5 knockdown on osteosarcoma cell proliferation and migration. These results demonstrated that upregulation of ANO5 promoted osteosarcoma development by decreasing the stability of the NELL1 and NELL2 proteins and that ANO5 may be an effective target for the treatment of osteosarcoma.