Rhabdomyosarcoma, a neoplasm composed of skeletal myoblast-like cells, represents the most common soft tissue sarcoma in children. The application of intensive chemotherapeutics and refined surgical and radiation therapy approaches have improved survival for children with localized disease over the past 3 decades; however, these approaches have not improved the dismal outcome for children with metastatic and recurrent rhabdomyosarcoma. Elegant studies have defined the molecular mechanisms driving skeletal muscle lineage commitment and differentiation, and the machinery that couples differentiation with irreversible cell proliferation arrest. Further, detailed molecular analyses indicate that rhabdomyosarcoma cells have lost the capacity to fully differentiate when challenged to do so in experimental models. We review the intersection of normal skeletal muscle developmental biology and the molecular genetic defects in rhabdomyosarcoma with the underlying premise that understanding how the differentiation process has gone awry will lead to new treatment strategies aimed at promoting myogenic differentiation and concomitant cell cycle arrest.