Ewing's sarcoma and related tumors (ESFT) are characterized by rearrangements of EWS with ets family genes. While detection of these gene fusions greatly facilitated diagnosis, it has not provided any clues about the tissue of origin. Immunological and gene expression profiling studies favour a neuroectodermal histogenesis. These investigations did not appreciate the impact of EWS-ets proteins on the tumor phenotype. Introduction of EWS-ets into different cellular models resulted in diverse outcomes ranging from the induction of cell cycle arrest or apoptosis to transformation and tumorigenicity, and from blocked differentiation to trans-differentiation. Thus, the molecular signature of EWS-ets proteins depends on the cell type. The hen or egg problem in ESFT, therefore, is whether ESFT reflect the phenotype of the tumor stem cell that is blocked in differentiation by the activity of the EWS-ets gene fusion or if the oncogene imposes an incomplete differentiation program on a pluripotent precursor cell. This article addresses the problem by considering the tissue distribution of FLI1 and ERG expression and by reviewing evidence for combinatorial control of EWS-ets activity.