Rhabdomyosarcoma (RMS) is a family of soft tissue tumors that are associated with the skeletal muscle lineage and generally occur in the pediatric population. Based on histopathologic features, two subtypes, embryonal (ERMS) and alveolar (ARMS), were identified and associated with distinct clinical characteristics and genetic alterations. ARMS is associated with 2;13 or 1;13 chromosomal translocations, which generate PAX3-FKHR and PAX7-FKHR fusion products, respectively. These translocations result in altered expression, function, and subcellular localization of the fusion products relative to the wild-type proteins, and ultimately contribute to oncogenic behavior by modifying growth, differentiation, and apoptosis pathways. In contrast to the specific translocations found in ARMS, most ERMS cases have allelic loss at chromosome 11p15.5. Chromosome fragment transfer studies demonstrated that this region represses tumor cell growth, suggesting the presence of tumor suppressor gene(s) in this region. In both ERMS and ARMS, there is evidence of collaborating alterations that affect common targets, such as the p53 and RB pathways. One mechanism for perturbing these pathways involves amplification of genes such as MDM2 and CDK4; these amplification events occur frequently in ARMS but only rarely in ERMS. Therefore, despite similarities in the downstream targets of these genetic alterations, the striking cytogenetic and molecular differences between ARMS and ERMS indicate distinct molecular etiologies in these two subtypes.