Mice carrying an H-2K-v-jun transgene develop malignant sarcomas by a multistage mechanism following wounding. Here we show that these malignancies are often heterogeneous in composition, containing both undifferentiated mesenchymal cells as well as focal areas of skeletal muscle. Such myogenic areas are not detectable in premalignant precursor lesions, suggesting that cells competent for muscle differentiation arise at a late stage of tumorigenesis. Immunohistochemical staining of transgenic sarcomas reveals that levels of v-Jun correlate inversely with muscle-specific gene expression, suggesting that high levels may be inhibitory to myogenesis. Consistent with this idea, we demonstrate that whereas high levels of v-Jun are able to block MyoD-dependent gene expression in vitro, the levels of v-Jun in sarcoma-derived myogenic cells are below the threshold required to produce this effect. The cell of origin of v-jun wound sarcomas, as well as the relationship between myogenic determination and multistage tumorigenesis, are discussed in the light of these results.