Recent findings have indicated that TP53 inactivation in sarcomas may result from mutation and/or deletion of the TP53 gene or, alternatively, from binding to the MDM2 gene products. To investigate further a possible role of the two genes in sarcomas, 24 large and deep-seated lipomas and 74 liposarcomas of various subtypes were analysed for mdm2 and p53 overexpression by immunocytochemistry. Nineteen cases of the same series were also molecularly analysed for both MDM2 gene amplification and TP53 mutations, and a further ten cases for non-random chromosomal abnormalities. In the retroperitoneal well-differentiated-dedifferentiated (WD-DD) group, 15/16 WD and 8/8 DD liposarcomas displayed the mdm2+/p53+ phenotype, consistent with MDM2 gene amplification in the absence of TP53 mutations. In the non-retroperitoneal WD-DD group, 5/11 WD liposarcomas also retained the mdm2+/p53+ phenotype whereas all DD liposarcomas showed an immunophenotype and, when assessed, a genotype consistent with mutant TP53. Null mdm2 immunophenotype, coupled with evidence of a specific chromosome translocation t(12;16), was constantly observed in both the usual and the cellular subtypes of myxoid liposarcoma, three cases of which also showed TP53 alterations at the genetic or protein level. Neither mdm2 nor p53 overexpression was observed in the lipomas. The results show the existence of three main pathogenetically distinct groups of liposarcoma. The first retroperitoneal WD-DD group, which represents a novel class of tumours within a single histological category of sarcoma, where MDM2-mediated inactivation of p53 could be related to the pathogenetic mechanism. The second is the non-retroperitoneal WD-DD group, where the TP53 mutations appear to correlate with the dedifferentiation process. The third is the myxoid group, which is characterized by its own unique cytogenetic profile and never shows any involvement of TP53 or MDM2 genes. As for diagnostic significance, the absence of mdm2 and p53 reactivity in lipomas seems to represent a useful marker for differential diagnosis from lipoma-like WD liposarcomas.