Liposarcomas are aggressive mesenchymal cancers with poor outcomes that exhibit remarkable histologic diversity (there are five recognized subtypes). Currently, the mainstay of therapy for liposarcoma is surgical excision because liposarcomas are often resistant to traditional chemotherapy. In light of the high mortality associated with liposarcoma and the lack of effective systemic therapy, we sought novel genomic alterations driving liposarcomagenesis that might serve as therapeutic targets. ZIC1, a critical transcription factor for neuronal development, is overexpressed in all five subtypes of liposarcoma compared with normal fat, and in liposarcoma cell lines compared with adipose-derived stem cells. Here, we show that ZIC1 contributes to the pathogenesis of liposarcoma. ZIC1 knockdown inhibits proliferation, reduces invasion, and induces apoptosis in dedifferentiated and myxoid/round cell liposarcoma cell lines, but not in either adipose-derived stem cells or in a lung cancer cell line with low ZIC1 expression. ZIC1 knockdown is associated with increased nuclear expression of p27 proteins and the downregulation of prosurvival target genes BCL2L13, JunD, Fam57A, and EIF3M. Our results show that ZIC1 expression is essential for liposarcomagenesis and that targeting ZIC1 or its downstream targets might lead to novel therapy for liposarcoma.