Tumor-specific translocations are common in tumors of mesenchymal origin. Whether the translocation determines the phenotype, or vice versa, is debatable. Ewing's family tumors (EFT) are consistently associated with an EWS-FLI1 translocation and a primitive neural phenotype. Histogenesis and classification are therefore uncertain. To test whether EWS-FLI1 fusion gene expression is responsible for the primitive neuroectodermal phenotype of EFT, we established a tetracycline-inducible EWS-FLI1 expression system in a rhabdomyosarcoma cell line RD. Cell morphology changed after EWS-FLI1 expression, resembling cultured EFT cells. Xenografts showed typical EFT features, distinct from tumors formed by parental RD. Neuron-specific microtubule gene MAPT, parasympathetic marker cholecystokinin, and epithelial marker keratin 18 were up-regulated. Conversely, myogenesis was diminished. Comparison of the up-regulated genes in RD-EF with the Ewing's signature genes identified important EWS-FLI1 downstream genes, many involved in neural crest differentiation. These results were validated by real-time reverse transcription-PCR analysis and RNA interference technology using small interfering RNA against EWS-FLI1 breakpoint. The present study shows that the neural phenotype of Ewing's tumors is attributable to the EWS-FLI1 expression and the resultant phenotype resembles developing neural crest. Such tumors have a limited neural phenotype regardless of tissue of origin. These findings challenge traditional views of histogenesis and tumor origin.