Synovial sarcoma (SS) is a malignant soft tissue tumor harboring chromosomal translocation t(X; 18)(p11.2; q11.2), which produces SS-specific fusion gene, SYT-SSX. Although precise function of SYT-SSX remains to be investigated, accumulating evidences suggest its role in gene regulation via epigenetic mechanisms, and the product of SYT-SSX target genes may serve as biomarkers of SS. Lack of knowledge about the cell-of-origin of SS, however, has placed obstacle in the way of target identification. Here we report a novel approach to identify SYT-SSX2 target genes using human pluripotent stem cells (hPSCs) containing a doxycycline-inducible SYT-SSX2 gene. SYT-SSX2 was efficiently induced both at mRNA and protein levels within three hours after doxycycline administration, while no morphological change of hPSCs was observed until 24 h. Serial microarray analyses identified genes of which the expression level changed more than twofold within 24 h. Surprisingly, the majority (297/312, 95.2%) were up-regulated genes and a result inconsistent with the current concept of SYT-SSX as a transcriptional repressor. Comparing these genes with SS-related genes which were selected by a series of in silico analyses, 49 and 2 genes were finally identified as candidates of up- and down-regulated target of SYT-SSX, respectively. Association of these genes with SYT-SSX in SS cells was confirmed by knockdown experiments. Expression profiles of SS-related genes in hPSCs and human mesenchymal stem cells (hMSCs) were strikingly different in response to the induction of SYT-SSX, and more than half of SYT-SSX target genes in hPSCs were not induced in hMSCs. These results suggest the importance of cellular context for correct understanding of SYT-SSX function, and demonstrated how our new system will help to overcome this issue. (C) 2013 Elsevier Inc. All rights reserved.