Alveolar rhabdomyosarcomas (ARMS) are aggressive soft-tissue sarcomas affecting children and young adults. Most ARMS tumors express the PAX3-FKHR or PAX7-FKHR (PAX-FKHR) fusion genes resulting from the t(2;13) or t(1;13) chromosomal translocations, respectively. However, up to 25% of ARMS tumors are fusion negative, making it unclear whether ARMS represent a single disease or multiple clinical and biological entities with a common phenotype. To test to what extent PAX-FKHR determine class and behavior of ARMS, we used oligonucleotide microarray expression profiling on 139 primary rhabdomyosarcoma tumors and an in vitro model. We found that ARMS tumors expressing either PAX-FKHR gene share a common expression profile distinct from fusion-negative ARMS and from the other rhabdomyosarcoma variants. We also observed that PAX-FKHR expression above a minimum level is necessary for the detection of this expression profile. Using an ectopic PAX3-FKHR and PAX7-FKHR expression model, we identified an expression signature regulated by PAX-FKHR that is specific to PAX-FKHR-positive ARMS tumors. Data mining for functional annotations of signature genes suggested a role for PAX-FKHR in regulating ARMS proliferation and differentiation. Cox regression modeling identified a subset of genes within the PAX-FKHR expression signature that segregated ARMS patients into three risk groups with 5-year overall survival estimates of 7%, 48%, and 93%. These prognostic classes were independent of conventional clinical risk factors. Our results show that PAX-FKHR dictate a specific expression signature that helps define the molecular phenotype of PAX-FKHR-positive ARMS tumors and, because it is linked with disease outcome in ARMS patients, determine tumor behavior. (Cancer Res 2006; 66(14): 6936-46)