Rhabdomyosarcoma is the most common soft-tissue sarcoma in childhood and histologically resembles developing skeletal muscle. Alveolar rhabdomyosarcoma (ARMS) is an aggressive subtype with a higher rate of metastasis and poorer prognosis. The majority of ARMS tumors (80%) harbor a PAX3-FOXO1 or less commonly a PAX7-FOXO1 fusion gene. The presence of either the PAX3-FOXO1 or PAX7-FOXO1 fusion gene foretells a poorer prognosis resulting in clinical re-classification as either fusion-positive (FP-RMS) or fusion-negative RMS (FN-RMS). The PAX3/7-FOXO1 fusion genes result in the production of a rogue transcription factors that drive FP-RMS pathogenesis and block myogenic differentiation. Despite knowing the molecular driver of FP-RMS, targeted therapies have yet to make an impact for patients, highlighting the need for a greater understanding of the molecular consequences of PAX3-FOXO1 and its target genes including microRNAs. Here we show FP-RMS patient-derived xenografts and cell lines display a distinct microRNA expression pattern. We utilized both loss- and gain-of function approaches in human cell lines with knockdown of PAX3-FOXO1 in FP-RMS cell lines and expression of PAX3-FOXO1 in human myoblasts and identified microRNAs both positively and negatively regulated by the PAX3-FOXO1 fusion protein. We demonstrate PAX3-FOXO1 represses miR-221/222 that functions as a tumor suppressing microRNA through the negative regulation of CCND2, CDK6, and ERBB3. In contrast, miR-486-5p is transcriptionally activated by PAX3-FOXO1 and promotes FP-RMS proliferation, invasion, and clonogenic growth. Inhibition of miR-486-5p in FP-RMS xenografts decreased tumor growth, illustrating a proof of principle for future therapeutic intervention. Therefore, PAX3-FOXO1 regulates key microRNAs that may represent novel therapeutic vulnerabilities in FP-RMS.