Although many cancers are maintained by tumor-initiating cells, this has not been shown for mesenchymal tumors, in part due to the lack of unique surface markers that identify mesenchymal progenitors. An alternative technique to isolate stem-like cells is to isolate side population (SP) cells based on efflux of Hoechst 33342 dye. We examined 29 mesenchymal tumors ranging from benign to high-grade sarcomas and identified SP cells in all but six samples. There was a positive correlation between the percentage of SP cells and the grade of the tumor. SP cells preferentially formed tumors when grafted into immunodeficient mice, and only cells from tumors that developed from the SP cells had the ability to initiate tumor formation upon serial transplantation. Although SP cells are able to efflux rhodamine dye in addition to Hoechst 33342, we found that the ability to efflux rhodamine dye did not identify a population of cells enriched for tumor-initiating capacity. Here, we identify a subpopulation of cells within a broad range of benign and malignant mesenchymal tumors with tumor-initiating capacity. In addition, our data suggest that the proportion of SP cells could be used as a prognostic factor and that therapeutically targeting this subpopulation of cells could be used to improve patient outcome.