The chromosomal translocation t(2;13), characteristic for the aggressive childhood cancer alveolar rhabdomyosarcoma (aRMS), generates the chimeric transcription factor PAX3/FKHR with a well known oncogenic role. However, the molecular mechanisms mediating essential pathophysiological functions remain poorly defined. Here, we used comparative expression profiling of PAX3/FKHR silencing in vitro and PAX3/FKHR-specific gene signatures in vivo to identify physiologically important target genes. Hereby, 51 activated genes, both novel and known, were identified. We also found repression of skeletal muscle-specific genes suggesting that PAX3/FKHR blocks further differentiation of aRMS cells. Importantly, TFAP2B was validated as direct target gene mediating the anti-apoptotic function of PAX3/FKHR. Hence, we developed a pathophysiologically relevant transcriptional profile of PAX3/FKHR and identified a critical target gene for aRMS development.