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PAX3andPAX7encode transcription factors implicated in the pathogenesis of rhabdomyosarcoma (RMS), including alveolar RMS in which chromosomal translocations generatePAX3-FKHRandPAX7-FKHRfusions. Previous studies of wild-type PAX3 and PAX7 identified alternative splicing events that modify the paired box and generate 2 isoforms of PAX3 (Q+ and Q−) and 4 isoforms of PAX7 (Q+GL+, Q+GL−, Q−GL+, Q−GL−). In our study, we investigated alternative splicing of the wild-type and fusion forms of PAX3 and PAX7 in alveolar and embryonal RMS and assessed the functional implications. For PAX3 and PAX3-FKHR, the Q+ and Q− isoforms were consistently co-expressed in RMS tumors with slightly higher levels of the Q+ isoform. For PAX7 and PAX7-FKHR, there was a consistent pattern of co-expression of the 4 isoforms in RMS tumors: Q+GL− > Q+GL+ ≥ Q−GL− > Q−GL+. DNA binding analysis demonstrated that PAX3 and PAX3-FKHR Q− isoforms exhibit higher affinity than corresponding Q+ isoforms for class I sites and no difference for class II sites. For PAX7 and PAX7-FKHR, the relative affinity was Q−GL− > Q+GL− > Q−GL+ ≥ Q+GL+ for class I sites and Q−GL−, Q+GL− > Q−GL+, Q+GL+ for class II sites. Finally, the transcriptional activities of the PAX3-FKHR and PAX7-FKHR isoforms on reporter plasmids varied over a 5-fold and 50-fold range, respectively, in accord with the differences in DNA binding activity. In conclusion, these studies reveal that PAX3, PAX7 and their fusions with FKHR are each expressed in RMS tumors as a consistent mixture of functionally distinct isoforms. © 2005 Wiley-Liss, Inc.