Activation of the GLI oncogene is an important step in the sonic hedgehog signaling pathway, and leads to, eg, tissue-specific cell proliferation during embryogenesis. GLI activity in adult tissues is restricted, but has been identified in various neoplasms, as a result of mutations in the PTCH (patched) or SMOH (smoothened) genes, encoding components of the sonic hedgehog pathway, or by amplification of GLI. Herein, we present a new mechanism of GLI activation through fusion with the beta-actin gene (ACTB) in five histologically distinctive soft tissue tumors showing a t(7;12)(p21-22;q13-15) and a pericytic phenotype. Each was composed of a perivascular proliferation of monomorphic short spindle cells that stained positively for smooth muscle actin and laminin and that showed pericytic features by electron microscopy. To date, with a median follow-up of 24 months, none has behaved in an aggressive manner. Molecular genetic analysis showed that the translocation in all cases resulted in a fusion transcript including the 5'-part of ACTB and the 3'-part of GLI. The DNA-binding zinc finger domains of GLI were retained in the fusion transcripts and it is likely that the replacement of the promoter region of GLI with that of the ubiquitously expressed ACTB gene leads to deregulation of GLI expression and its downstream target genes.