Recurrent parosteal sarcomas with vascular involvement are rare and present unique challenges in their diagnosis and management. We report the case of a 21-year-old woman with parosteal osteosarcoma of the left distal femur, encasing the popliteal vessels. En bloc transarticular resection of the distal femur and popliteal vessels was performed, followed by reconstruction using a modular prosthesis and a saphenous vein autograft for both the artery and vein. On the 1st postoperative day, the patient developed an arterial thrombus requiring reintervention with a jump polytetrafluoroethylene (PTFE) graft. Histopathology confirmed parosteal osteosarcoma.After a disease-free survival of 41 months, the patient experienced local recurrence involving the PTFE graft, leading to graft compression, erosion, and subsequent thrombosis. Despite these complications, limb salvage was possible due to adequate collateral blood supply. This case highlights the feasibility of limb salvage surgery in select cases of parosteal osteosarcoma with vascular involvement.