Malignant peripheral nerve sheath tumours (MPNSTs) are aggressive soft tissue tumours that occur either sporadically or in patients with neurofibromatosis type 1. The malignant transformation of the benign neurofibroma to MPNST is incompletely understood at the molecular level. We have determined the gene expression signature for benign and malignant PNSTs and found that the major trend in malignant transformation from neurofibroma to MPNST consists of the loss of expression of a large number of genes, rather than widespread increase in gene expression. Relatively few genes are expressed at higher levels in MPNSTs and these include genes involved in cell proliferation and genes implicated in tumour metastasis. In addition, a gene expression signature indicating p53 inactivation is seen in the majority of MPNSTs. Subsequent microRNA profiling of benign and malignant PNSTs indicated a relative down-regulation of miR-34a in most MPNSTs compared to neurofibromas. In vitro studies using the cell lines MPNST-14 (NF1 mutant) and MPNST-724 (from a non-NF1 individual) show that exogenous expression of p53 or miR-34a promotes apoptotic cell death. In addition, exogenous expression of p53 in MPNST cells induces miR-34a and other miRNAs. Our data show that p53 inactivation and subsequent loss of expression of miR-34a may significantly contribute to the MPNST development. Collectively, our findings suggest that deregulation of miRNAs has a potential role in the malignant transformation process in peripheral nerve sheath tumours.