Liposarcoma cell lines represent in vitro models for studying disease mechanisms at the cellular level and for preclinical evaluation of novel drugs. To date there are a limited number of well-characterized models available. In this study, nine immortal liposarcoma cell lines were evaluated for tumor-forming ability, stem cell- and differentiation potential, and metastatic potential, with the aim to generate a well-characterized liposarcoma cell line panel. Detailed stem cell and differentiation marker analyses were also performed. Five of the liposarcoma cell lines were tumorigenic, forming tumors in mice. Interestingly, tumor-forming ability correlated with high proliferative capacity in vitro. All the cell lines underwent adipocytic differentiation, but the degree varied. Surprisingly, the expression of stem cell and differentiation markers did not correlate well with function. Overall, the panel contains cell lines suited for in vivo analyses (LPS141, SA-4, T778, SW872, and LISA-2), for testing novel drugs targeting cancer stem cells (LPS141) and for studying tumor progression and metastasis (T449 and T778).