Defects in achieving a fully differentiated state and aberrant expression of genes and microRNAs (miRs) involved in differentiation are common to virtually all tumor types. Here, we demonstrate that the zinc finger transcription factor ZNF281/Zfp281 is down-regulated during epithelial, muscle and granulocytic differentiation in vitro. The expression of this gene is absent in terminally differentiated human tissues, in contrast to the elevated expression in proliferating/differentiating ones. Analysis of the 3'UTR of ZNF281/Zfp281 revealed the presence of numerous previously undescribed miR binding sites that were proved to be functional for miR-mediated post-transcriptional regulation. Many of these miRs are involved in differentiation pathways of distinct cell lineages. Of interest, ZNF281/Zfp281 is able to inhibit muscle differentiation promoted by miR-1, of which ZNF281/Zfp281 is a direct target. These data suggest that down-regulation of ZNF281/Zfp281 during differentiation in various cell types may occur through specific miRs whose expression is tissue-restricted. In addition, we found that in rhabdomyosarcoma and leiomyosarcoma tumors the expression of ZNF281/Zfp281 is significantly higher compared with normal counterparts. We extended our analysis to other human soft tissue sarcomas, in which the expression of ZNF281 is associated with a worse prognosis. In summary, we highlight here a new role of ZNF281/Zfp281 in counteracting muscle differentiation; its down-regulation is at least in part mediated by miR-1. The elevated expression of ZNF281/Zfp281 in soft tissue sarcomas warrants further analysis for its possible exploitation as a prognostic marker in this class of tumors.