Cancer stem cells that display tumor-initiating properties have recently been identified in several distinct types of malignancies, holding promise for more effective therapeutic strategies. However, evidence of such cells in sarcomas, which include some of the most aggressive and therapy-resistant tumors, has not been shown to date. Here, we identify and characterize cancer stem cells in Ewing's sarcoma family tumors (ESFT), a highly aggressive pediatric malignancy believed to be of mesenchymal stem cell (MSC) origin. Using magnetic bead cell separation of primary ESFT, we have isolated a subpopulation of CD133+ tumor cells that display the capacity to initiate and sustain tumor growth through serial transplantation in nonobese diabetic/severe combined immunodeficiency mice, re-establishing at each in vivo passage the parental tumor phenotype and hierarchical cell organization. Consistent with the plasticity of MSCs, in vitro differentiation assays showed that the CD133+ cell population retained the ability to differentiate along adipogenic, osteogenic, and chondrogenic lineages. Quantitative real-time PCR analysis of genes implicated in stem cell maintenance revealed that CD133+ ESFT cells express significantly higher levels of OCT4 and NANOG than their CD133- counterparts. Taken together, our observations provide the first identification of ESFT cancer stem cells and demonstration of their MSC properties, a critical step towards a better biological understanding and rational therapeutic targeting of these tumors.