Recently, FGFR1 was found to be overexpressed in osteosarcoma and represents an important target for precision medicine. However, because targeted cancer therapy based on FGFR inhibitors has so far been less efficient than expected, a detailed understanding of the target is important. We have here applied proximity-dependent biotin labeling combined with label-free quantitative mass spectrometry to identify determinants of FGFR1 activity in an osteosarcoma cell line. Many known FGFR interactors were identified (e.g. FRS2, PLCG1, RSK2, SRC), but the data also suggested novel determinants. A strong hit in our screen was the tyrosine phosphatase PTPRG. We show that PTPRG and FGFR1 interact and colocalize at the plasma membrane where PTPRG directly dephosphorylates activated FGFR1. We further show that osteosarcoma cell lines depleted for PTPRG display increased FGFR activity and are hypersensitive to stimulation by FGF1. In addition, PTPRG depletion elevated cell growth and negatively affected the efficacy of FGFR kinase inhibitors. Thus, PTPRG may have future clinical relevance by being a predictor of outcome after FGFR inhibitor treatment.