Smooth muscle (SM) is a spontaneously contractile tissue that provides physical support and function to organs such as the uterus. Uterine smooth muscle–related neoplasia comprise common well-differentiated benign lesions called leiomyomas (ULM), and rare, highly aggressive and pleomorphic tumors named leiomyosarcomas (ULMS). MicroRNAs (miRNAs) are small non-coding RNAs that play essential roles in normal cellular development and tissue homeostasis that can be used to accurately subclassify different tumor types. Here, we demonstrate that miRNAs are required for full smooth muscle cell (SMC) differentiation of bone marrow–derived human mesenchymal stem cells (hMSCs). We also report a miRNA signature associated with this process. Moreover, we show that this signature, along with miRNA profiles for ULMS and ULM, are able to subclassify tumors of smooth muscle origin along SM differentiation. Using multiple computational analyses, we determined that ULMS are more similar to hMSCs as opposed to ULM, which are linked with more mature SMCs and myometrium. Furthermore, a comparison of the SM differentiation and ULMS miRNA signatures identified miRNAs strictly associated with SM maturation or transformation, as well as those modulated in both processes indicating a possible dual role. These results support separate origins and/or divergent transformation pathways for ULM and ULMS, resulting in drastically different states of differentiation. In summary, this work expands on our knowledge of the regulation of SM differentiation and sarcoma pathogenesis.