Ewing sarcoma (ES) and peripheral primitive neuroectodermal tumors (PNETs) are associated with a chromosomal translocation resulting in a fusion of the amino‐terminus of EWS with the DNA‐binding domain of an ETS transcription factor (most commonly FLI1 or ERG). Although previous reports suggested that these chimera proteins would act as aberrant transcription factors, their downstream targets have not been fully elucidated. To identify downstream targets of these EWS‐ETS fusion proteins, we introduced EWS‐ETS fusion constructs into a human fibrosarcoma cell line, HT‐1080, by retroviral transduction. Here we report that Tenascin‐C (TNC) is induced to a significantly higher level in cells expressing EWS‐ETSs than in cells expressing normal ETSs. Furthermore, through use of an antisense cDNA expression vector we show that expression of endogenous TNC mRNA and protein were reduced coordinately with attenuation of EWS‐FLI1 fusion protein expression. A chromatin immunoprecipitation assay showed direct interaction between the TNC promoter and the EWS‐FLI1 fusion protein in vivo. In addition, a luciferase reporter assay revealed that EWS‐ETSs upregulated the TNC gene through four ETS binding sites in the TNC promoter. High levels of TNC expression were observed in a subset of ES cell lines (3 of 6) and primary tumors (4 of 6). Together with previous studies showing that TNC expression is involved in the invasive and malignant phenotype of several tumor types, our data suggest that the oncogenic effect of EWS‐ETS may be mediated in part by upregulating of TNC expression. © 2003 Wiley‐Liss, Inc.