Comprehensive analysis of alterations in gene expression along with neoplastic transformation in human cells provides valuable information about the molecular mechanisms underlying transformation. To further address these questions, we performed whole transcriptome analysis to the human mesenchymal stem cell line, UE6E7T-3, which was immortalized with hTERT and human papillomavirus type 16 E6/E7 genes, in association with progress of transformation in these cells. At early stages of culture, UE6E7T-3 cells preferentially lost one copy of chromosome 13, as previously described; in addition, tumor suppressor genes, DNA repair genes, and apoptosis-activating genes were overexpressed. After the loss of chromosome 13, additional aneuploidy and genetic alterations that drove progressive transformation, were observed. At this stage, the cell line expressed oncogenes as well as genes related to anti-apoptotic functions, cell-cycle progression, and chromosome instability (CIN); these pro-tumorigenic changes were concomitant with a decrease in tumor suppressor gene expression. At later stages after prolong culture, the cells exhibited chromosome translocations, acquired anchorage-independent growth and tumorigenicity in nude mice, (sarcoma) and exhibited increased expression of genes encoding growth factor and DNA repair genes, and decreased expression of adhesion genes. In particular, glypican-5 (GPC5), which encodes a cell-surface proteoglycan that might be a biomarker for sarcoma, was expressed at high levels in association with transformation. Patched (Ptc1), the cell surface receptor for hedgehog (Hh) signaling, was also significantly overexpressed and co-localized with GPC5. Knockdown of GPC5 expression decreased cell proliferation, suggesting that it plays a key role in growth in U3-DT cells (transformants derived from UE6E7T-3 cells) through the Hh signaling pathway. Thus, the UE6E7T-3 cell culture model is a useful tool for assessing the functional contribution of genes showed by expression profiling to the neoplastic transformation of human fibroblasts and human mesenchymal stem cells (hMSC).