Ewing's sarcoma is a malignant bone-associated tumor of children and young adults. Most cases of Ewing's sarcoma express the EWS/FLI fusion protein. EWS/FLI functions as an aberrant ETS-type transcription factor and serves as the master regulator of Ewing's sarcoma-transformed phenotype. We recently showed that EWS/FLI regulates one of its key targets, NR0B1, through a GGAA-microsatellite in its promoter. Whether other critical EWS/FLI targets are also regulated by GGAA-microsatellites was unknown. In this study, we combined transcriptional analysis, whole genome localization data, and RNA interference knockdown to identify glutathione S-transferase M4 (GSTM4) as a critical EWS/FLI target gene in Ewing's sarcoma. We found that EWS/FLI directly binds the GSTM4 promoter, and regulates GSTM4 expression through a GGAA-microsatellite in its promoter. Reduction of GSTM4 levels caused a loss of oncogenic transformation. Furthermore, reduction of GSTM4 resulted in an increased sensitivity of Ewing's sarcoma cells to chemotherapeutic agents, suggesting a role for this protein in drug resistance. Consistent with this hypothesis, patients with Ewing's sarcoma whose tumors had higher levels of GSTM4 expression had worse outcomes than those with lower expression levels. These data show that GSTM4 contributes to the cancerous behavior of Ewing's sarcoma and define a wider role for GGAA-microsatellites in EWS/FLI function than previously appreciated. These data also suggest a novel therapeutic resistance mechanism, in which the central oncogenic abnormality directly regulates a resistance gene.