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Angiomyolipoma (AML), the most common benign renal tumor, can result in severe morbidity from hemorrhage and renal failure. While mTORC1 activation is involved in its growth, mTORC1 inhibitors fail to eradicate AML, highlighting the need for new therapies. Moreover, the identity of the AML cell of origin is obscure. AML research, however, is hampered by the lack of in vivo models. Here, we establish a human AML-xenograft (Xn) model in mice, recapitulating AML at the histological and molecular levels. Microarray analysis demonstrated tumor growth in vivo to involve robust PPARγ-pathway activation. Similarly, immunostaining revealed strong PPARγ expression in human AML specimens. Accordingly, we demonstrate that while PPARγ agonism accelerates AML growth, PPARγ antagonism is inhibitory, strongly suppressing AML proliferation and tumor-initiating capacity, via a TGFB-mediated inhibition of PDGFB and CTGF. Finally, we show striking similarity between AML cell lines and mesenchymal stem cells (MSCs) in terms of antigen and gene expression and differentiation potential. Altogether, we establish the first in vivo human AML model, which provides evidence that AML may originate in a PPARγ-activated renal MSC lineage that is skewed toward adipocytes and smooth muscle and away from osteoblasts, and uncover PPARγ as a regulator of AML growth, which could serve as an attractive therapeutic target., (© 2017 The Authors. Published under the terms of the CC BY 4.0 license.)