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Canine osteosarcoma (OSA) is the most common primary malignant bone tumour in dogs, and it has a high metastatic rate and poor prognosis. Toceranib phosphate (TOC; Palladia, Zoetis) is a veterinary tyrosine kinase inhibitor that selectively inhibits VEGFR-2, PDGFRs and c-Kit, but its efficacy is not yet fully understood in the treatment of canine OSA. Here, we evaluated the functional effects of TOC on six OSA cell lines by transwell, wound healing and colony formation assays. Subsequently, two cell lines (Wall and Penny) were selected and were inoculated in mice by intrafemoral injection to develop an orthotopic xenograft model of canine OSA. For each cell line, 30 mice were xenografted; half of them were used as controls, and the other half were treated with TOC at 40 mg/kg body weight for 20 days. TOC inhibited cell growth of all cell lines, but reduced invasion and migration was only observed in Penny and Wall cell lines. In mice engrafted with Penny cells and subjected to TOC treatment, decreased tumour growth was observed, and PDGFRs and c-Kit mRNA were downregulated. Immunohistochemical analyses demonstrated a significant reduction of Ki67 staining in treated mice when compared to controls. The results obtained here demonstrate that TOC is able to slightly inhibit cell growth in vitro, while its effect is evident only in a Penny cell xenograft model, in which TOC significantly reduced tumour size and the Ki67 index without modifying apoptosis markers.