The PAX3-FOXO1 fusion protein is the key oncogenic driver in fusion positive rhabdomyosarcoma (FP-RMS), an aggressive soft tissue malignancy with a particularly poor prognosis. Identifying key downstream targets of PAX3-FOXO1 will provide new therapeutic opportunities for treatment of FP-RMS. Herein, we demonstrate that Forkhead Box F1 (FOXF1) transcription factor is uniquely expressed in FP-RMS and is required for FP-RMS tumorigenesis. The PAX3-FOXO1 directly binds to FOXF1 enhancers and induces FOXF1 gene expression. CRISPR/Cas9 mediated inactivation of either FOXF1 coding sequence or FOXF1 enhancers suppresses FP-RMS tumorigenesis even in the presence of PAX3-FOXO1 oncogene. Knockdown or genetic knockout of FOXF1 induces myogenic differentiation in PAX3-FOXO1-positive FP-RMS. Over-expression of FOXF1 decreases myogenic differentiation in primary human myoblasts. In FP-RMS tumor cells, FOXF1 protein binds chromatin near enhancers associated with FP-RMS gene signature. FOXF1 cooperates with PAX3-FOXO1 and E-box transcription factors MYOD1 and MYOG to regulate FP-RMS-specific gene expression. Altogether, FOXF1 functions downstream of PAX3-FOXO1 to promote FP-RMS tumorigenesis.