Oncogenic transformation in Ewing sarcoma is caused by EWS/FLI, an aberrant transcription factor fusion oncogene. Glioma-associated oncogene homolog 1 (GLI1) is a critical target gene activated by EWS/FLI, but the mechanism by which GLI1 contributes to the transformed phenotype of Ewing sarcoma was unknown. In this work, we identify keratin 17 (KRT17) as a direct downstream target gene upregulated by GLI1. We demonstrate that KRT17 regulates cellular adhesion by activating AKT/PKB (protein kinase B) signaling. In addition, KRT17 is necessary for oncogenic transformation in Ewing sarcoma and accounts for much of the GLI1-mediated transformation function but via a mechanism independent of AKT signaling. Taken together, our data reveal previously unknown molecular functions for a cytoplasmic intermediate filament protein, KRT17, in coordinating EWS/FLI- and GLI1-mediated oncogenic transformation and cellular adhesion in Ewing sarcoma.