Oncogenic transformation in Ewing sarcoma tumors is driven by the fusion oncogene EWS-FLI1. However, despite the wellestablished role of EWS-FLI1 in tumor initiation, the development of models of Ewing sarcoma in human cells with defined genetic elements has been challenging. Here, we report a novel approach to model the initiation of Ewing sarcoma tumorigenesis that exploits the developmental and pluripotent potential of human embryonic stem cells. The inducible expression of EWS-FLI1 in embryoid bodies, or collections of differentiating stem cells, generates cells with properties of Ewing sarcoma tumors, including characteristics of transformation. These cell lines exhibit anchorage-independent growth, a lack of contact inhibition and a strong Ewing sarcoma gene expression signature. Furthermore, these cells also demonstrate a requirement for the persistent expression of EWS-FLI1 for cell survival and growth, which is a hallmark of Ewing sarcoma tumors.