The PAX3-FKHR fusion protein is present in a majority of alveolar rhabdomyosarcomas associated with increased aggressiveness and poor prognosis. To better understand the molecular pathogenesis of PAX3-FKHR, we carried out the first, unbiased genome-wide identification of PAX3-FKHR binding sites and associated target genes in alveolar rhabdomyosarcoma. The data shows that PAX3-FKHR binds to the same sites as PAX3 at both MYF5 and MYOD enhancers. The genome-wide analysis reveals that the PAX3-FKHR sites are (a) mostly distal to transcription start sites, (b) conserved, (c) enriched for PAX3 motifs, and (d) strongly associated with genes overexpressed in PAX3-FKHR-positive rhabdomyosarcoma cells and tumors. There is little evidence in our data set for PAX3-FKHR binding at the promoter sequences. The genome-wide analysis further illustrates a strong association between PAX3 and E-box motifs in these binding sites, suggestive of a common coregulation for many target genes. We also provide the first direct evidence that FGFR4 and IGF1R are the targets for PAX3-FKHR. The map of PAX3-FKHR binding sites provides a framework for understanding the pathogenic roles of PAX3-FKHR, as well as its molecular targets to allow a systematic evaluation of agents against this aggressive rhabdomyosarcoma.