Rhabdomyosarcoma is a pediatric tumor type, which is classified based on histological criteria into two major subgroups, namely embryonal rhabdomyosarcoma and alveolar rhabdomyosarcoma. The majority, but not all, alveolar rhabdomyosarcoma carry the specific PAX3(7)/FKHR-translocation, whereas there is no consistent genetic abnormality recognized in embryonal rhabdomyosarcoma. To gain additional insight into the genetic characteristics of these subtypes, we used oligonucleotide microarrays to measure the expression profiles of a group of 29 rhabdomyosarcoma biopsy samples (15 embryonal rhabdomyosarcoma, and 10 translocation-positive and 4 translocation-negative alveolar rhabdomyosarcoma). Hierarchical clustering revealed expression signatures clearly discriminating all three of the subgroups. Differentially expressed genes included several tyrosine kinases and G protein-coupled receptors, which might be amenable to pharmacological intervention. In addition, the alveolar rhabdomyosarcoma signature was used to classify an additional alveolar rhabdomyosarcoma case lacking any known PAX3 or PAX7 fusion as belonging to the translocation-positive group, leading to the identification of a novel translocation t(2;2)(q35;p23), which generates a fusion protein composed of PAX3 and the nuclear receptor coactivator NCOA1, having similar transactivation properties as PAX3/FKHR. These experiments demonstrate for the first time that gene expression profiling is capable of identifying novel chromosomal translocations.