Sarcomas are rare connective tissue cancers thought to arise from aberrant mesenchymal stem cell (MSC) differentiation. Liposarcoma (LPS) holds valuable insights into dysfunctional differentiation given its well- and dedifferentiated histologic subtypes (WDLPS, DDLPS). Despite well-established differences in histology and clinical behavior, the molecular pathways underlying each subtype are poorly understood. Here, we performed single-nucleus multiome sequencing and spatial profiling on carefully curated human LPS samples and found defects in adipocyte-specific differentiation within LPS. Loss of insulin-like growth factor 1 (IGF1) and gain of cellular programs related to early mesenchymal development and glucagon-like peptide-1 (GLP-1)-induced insulin secretion are primary features of DDLPS. IGF1 loss was associated with worse overall survival in LPS patients. Through