The identification of gene fusions in rare sarcoma subtypes can have diagnostic, prognostic, and therapeutic impacts for advanced cancer patients. Here, we present a case of a 31‐year‐old male with a lytic lesion of the left mandible initially diagnosed as an osteosarcoma but found to have a TFCP2 fusion and ALK alteration, redefining the diagnosis and providing rationale for a novel treatment strategy. Histologically, the tumor displayed hypercellular, spindled to epithelioid neoplasm and nuclear pleomorphism, while immunohistochemistry showed diffuse SATB2 and focal desmin staining. Whole genome and transcriptome analysis revealed a FUS::TFCP2 fusion, the defining alteration of a rare molecularly characterized subtype of soft tissue sarcoma termed intraosseous rhabdomyosarcoma. An internal ALK deletion and extremely high ALK RNA expression were also identified, suggesting potential benefit of an ALK inhibitor. This patient displayed a rapid and dramatic clinical and radiographic response to an ALK inhibitor, alectinib. Unfortunately, the response was short‐lived, likely due to the advanced stage and aggressiveness of the disease. This report describes genome and transcriptome characterization of an intraosseous rhabdomyosarcoma, few of which exist in the literature, as well as providing evidence that inhibition of ALK may be a rational treatment strategy for patients with this exceedingly rare soft tissue sarcoma subtype characterized by TFCP2 fusions and ALK activation.