A subset of sarcomas is associated with specific chromosomal translocations that give rise to fusion genes believed to participate in transformation and oncogenesis. Identification of the primary cell environment that provides permissiveness for the oncogenic potential of these fusion genes is essential to understand sarcoma pathogenesis. We have recently shown that expression of the EWS-FLI-1 fusion protein in primary mesenchymal progenitor cells (MPCs) suffices to develop Ewing's sarcoma-like tumors in mice. Because most sarcomas bearing unique chromosomal translocations are believed to originate from common progenitor cells, and because MPCs populate most organs, we expressed the sarcoma-associated fusion proteins FUS/TLS-CHOP, EWS-ATF1, and SYT-SSX1 in MPCs and tested the tumorigenic potential of these cells in vivo. Whereas expression of EWS-ATF1 and SYT-SSX1 failed to transform MPCs, FUS-CHOP–expressing cells formed tumors resembling human myxoid liposarcoma. Transcription profile analysis of these tumors revealed induction of transcripts known to be associated with myxoid liposarcoma and novel candidate genes, including PDGFA, whose expression was confirmed in human tumor samples. MPC^FUS-CHOP and the previously described MPC^EWS-FLI-1 tumors displayed distinct transcription profiles, consistent with the different target gene repertoires of their respective fusion proteins. Unexpectedly, a set of genes implicated in cell survival and adhesion displayed similar behavior in the two tumors, suggesting events that may be common to primary MPC transformation. Taken together, our observations suggest that expression of FUS-CHOP may be the initiating event in myxoid liposarcoma pathogenesis, and that MPCs may constitute one cell type from which these tumors originate. (Cancer Res 2006; 66(14): 7016-23)