The long non-coding RNA taurine up-regulated gene 1 (TUG1) has been reported to be involved in various cancers, but its role in chondrosarcoma (CHS) remains a mystery. This research aimed to examine the function of TUG1 in CHS. We found that TUG1 expression was elevated in CHS. Functional assays demonstrated that TUG1 had a crucial role in the CHS cell progression. Mechanistically, TUG1 recruited ALYREF to maintain the stabilization of enhancer of zest homolog 2 (EZH2) mRNA and expression of H3K27me3, repressing the transcription of the tumor-suppressor gene CPEB1. Additionally, exosomal TUG1 enhanced the polarization of M2 tumor-associated macrophages, which increased the proliferation and metastasis of CHS. Taken together, this study revealed the oncogenic role of TUG1 in CHS and its interactions with the downstream regulatory axis, offering novel insights into the tumorigenic mechanism of CHS.