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Cancer-associated fibroblasts (CAFs) serve as a predominant regulator in the tumor microenvironment. However, the crosstalk between CAFs and OS cells remains mostly unclear. Recent studies explored that long non-coding RNA (LncRNAs) involved in regulating osteosarcoma (OS) formation and development, but their functions in CAFs are unknown. Here, we first investigated the SNHG17 was upregulated in OS tissues and correlated with the poor prognosis through the integrating clinical data. We then evaluated the function of SNHG17 in vitro using the stable SNHG17-depleted OS cells. HOS cells with SNHG17 knocked down were performed to generate the OS xenograft model. Through immunohistochemistry assay and TUNEL apoptosis assay, the role of SNHG17 on OS development was assessed in vivo. We then examined the SNHG17 expression in exosomes derived from CAFs, normal fibroblasts (NFs), and tumor tissues from the OS clinical samples. The interaction among SNHG17, miR-2861, and MMP2 was predicted by bioinformatics analysis and identified by RIP and luciferase assays. The cell proliferation, migration, and apoptosis of SJSA-1 and HOS cells co-cultured with CAFs-derived exosomes were assessed by CCK-8 and colony formation assays. We found that SNHG17 was upregulated in the tumor tissues and presented a pro-tumorigenic effect on OS both in vitro and in vivo. It also was an essential exosomal cargo of CAFs and could affect OS cell proliferation and migration in vitro. CAFs-released exosomal SNHG17 acted as an essential molecular sponge for miR-2861 in OS cells. Moreover, MMP2 was a direct target of miR-2861 and was regulated by SNHG17. Overall, our findings identified that SNHG17 was an essential exosomal cargo of OS-related CAFs that contributes to proliferation and metastasis of OS, supporting the therapeutic potency of targeting the crosstalk between cancer cells and CAFs.