Rhabdomyosarcomas are characterized by expression of myogenic specification genes, such as MyoD and/or Myf5, and some muscle structural genes in a population of cells that continues to replicate. Because MyoD is sufficient to induce terminal differentiation in a variety of cell types, we have sought to determine the molecular mechanisms that prevent MyoD activity in human embryonal rhabdomyosarcoma cells. In this study, we show that a combination of inhibitory Musculin:E-protein complexes and a novel splice form of E2A compete with MyoD for the generation of active full-length E-protein:MyoD heterodimers. A forced heterodimer between MyoD and the full-length E12 robustly restores differentiation in rhabdomyosarcoma cells and broadly suppresses multiple inhibitory pathways. Our studies indicate that rhabdomyosarcomas represent an arrested progress through a normal transitional state that is regulated by the relative abundance of heterodimers between MyoD and the full-length E2A proteins. The demonstration that multiple inhibitory mechanisms can be suppressed and myogenic differentiation can be induced in the RD rhabdomyosarcomas by increasing the abundance of MyoD:E-protein heterodimers suggests a central integrating function that can be targeted to force differentiation in muscle cancer cells.