Rhabdomyosarcoma, the most common soft tissue malignancy of childhood, is a morphologically variable tumor defined by its phenotype of skeletal muscle differentiation. The diagnosis of rhabdomyosarcoma often relies in part on the identification of myogenic gene expression using immunohistochemical or molecular techniques. However, these techniques show imperfect sensitivity and specificity, particularly in scant tissue biopsies. Here, we expand the toolkit for rhabdomyosarcoma diagnosis by studying the expression of PAX7, a transcriptional regulator of mammalian muscle progenitor cells implicated in the pathogenesis of rhabdomyosarcoma. Immunohistochemical analysis of tissue microarrays using a monoclonal anti-PAX7 antibody was used to characterize PAX7 expression in 25 non-neoplastic tissues, 109 rhabdomyosarcomas, and 697 small round blue cell or other soft tissue tumors. Among non-neoplastic tissues, PAX7 was specifically expressed in adult muscle progenitor cells (satellite cells). In embryonal rhabdomyosarcoma, PAX7 expression was positive in 52 of 63 cases (83%), negative in 9 of 63 cases (14%), and focal in 2 of 63 cases (3%). PAX7-positive embryonal rhabdomyosarcoma cases included several showing focal or negative myogenin expression. PAX7 expression in alveolar rhabdomyosarcoma was positive in 6 of 31 cases (19%), negative in 14 of 31 cases (45%), and focal in 11 of 31 cases (36%). In addition, PAX7 was expressed in 5 of 7 pleomorphic rhabdomyosarcomas (71%) and 6 of 8 spindle cell rhabdomyosarcomas (75%). Among histologic mimics, only Ewing sarcoma showed PAX7 expression (7/7 cases, 100%). In contrast, expression of PAX7 was not seen in the large majority (688/690, 99.7%) of examined cases of other soft tissue tumors, small round blue cell neoplasms, and leukemias/lymphomas. In summary, immunohistochemical analysis of PAX7 expression may be a useful diagnostic tool in the assessment of skeletal muscle differentiation in human tumors.