Rhabdomyosarcomas are a heterogeneous group of malignant tumors and are the most common soft-tissue sarcoma of childhood. Rhabdomyosarcomas resemble developing skeletal muscle, notably in their expression of the MRF family of transcription factors and the PAX3 and PAX7 genes. These PAX genes are also involved through specific translocations, t(2;13)(q35;q14) and variant t(1;13)(p36;q14) in the alveolar subtype, which result in PAX3-FKHR and PAX7-FKHR fusion genes, respectively. The fusion genes are thought critically to affect downstream targets of PAX3 and PAX7 or possibly have novel targets. Similar downstream changes may also be involved in embryonal and fusion gene negative cases. Genomic amplification of such genes as MYCN, MDM2, CDK4, and PAX7-FKHR is a feature mainly of the alveolar subtype, while specific chromosomal gains, including chromosomes 2, 8, 12, and 13, are associated with the embryonal subtype. Loss of alleles and imprinting at 11p15.5 and disruption of genes such as IGF2, ATR, PTC, P16, and TP53 have also been implicated in rhabdomyosarcoma development. Whereas there is now a realistic possibility of cure in the majority of cases, there remains a subset that is resistant to multimodality therapy, including high-dose chemotherapy. Characterization of the defining molecular features of tumors that are likely to behave aggressively represents a particular challenge. Current research is leading toward a better understanding of rhabdomyosarcoma tumorigenesis, which may ultimately result in novel therapeutic strategies that increase the overall cure.