CXCR4 is a G protein-coupled receptor expressed on versatile tissue/organ specific stem cells that binds the α-chemokine SDF-1, and the PAX gene family (PAX1 – 9) encodes transcription factors that have been implicated in organogenesis and stem cell development. It has been demonstrated that the SDF-1-CXCR4 axis regulates trafficking of several types of normal early stem/progenitor cells and malignant tumor cells that derive from them. Recently our group focused on the role of CXCR4 in regulating the motility of skeletal muscle stem/progenitors and reported that it is expressed on normal skeletal muscle satellite stem cells (Stem Cells 2003; 21: 363.), and is highly up-regulated on rhabdomyosarcomas (RMS) (Blood 2002; 100: 2597) originating from transformed muscle satellite cells. We observed that the expression of CXCR4 correlated with the presence of PAX3 and PAX7 transcription factors (muscle satellite stem cells) and was up-regulated in RMS cells that express the more active version of PAX genes, PAX3-FKHR and PAX7-FKHR fusion proteins. Based on this we hypothesized that PAX genes regulate CXCR4 expression in normal muscle satellite stem cells and their more active fusion-gene counterparts are responsible for up-regulation of CXCR4 in RMS. To better address this issue, we first compared CXCR4 expression by real-time RT-PCR and FACS in several human RMS cells lines and found that expression of CXCR4 correlated with the more metastatic, alveolar subtype of RMS and a better responsiveness to SDF-1. Second, sequence analysis of the CXCR4 promoter revealed several putative PAX gene binding sites (ATTA and GTNNN motifs) at −658–672, −696–709, −737–758, −809–821, −1580–1610, −1693–1697, −1853–1857, −1865–1879, −1937–1946, −2195–2199 and −2297–2302 bp of the reported CXCR4 promoter sequence. Third, to evaluate whether PAX regulates the expression of CXCR4, a 2335 bp upstream fragment of the human CXCR4 promoter gene or its shorter fragments (1819 bp, 1547 bp, 850 bp, 528 bp and 106 bp) were subcloned into a CAT basic reporter gene plasmid and assayed in cells expressing or not expressing the PAX3-FKHR fusion gene. We observed that the CAT activity of all promoter fragments except the 1547 bp fragment was significantly enhanced in cells transduced with the PAX3-FKHR expression vector, what suggests the presence of a negative regulatory element in addition to several positive regulatory PAX binding domains. No promoter activity was observed with the smallest 106 bp fragment. Finally, chromatin immunoprecipitation (ChIP) assay revealed that the PAX3-FKHR protein binds to the CXCR4 promoter. Thus, we provide evidence that expression of CXCR4 is regulated by PAX transcription regulatory factors. Furthermore, we postulate that various PAX proteins that bind to similar DNA consensus sequences may regulate CXCR4 expression in various early normal stem/progenitor cells in a tissue-specific manner (e.g., PAX 1 in osteoblastic progenitors, PAX 3 in neural-crest and skeletal muscle progenitors, PAX 5 in B lymphocytes, PAX 6 in endocrine pancreatic progenitors, PAX 7 in skeletal muscle satellite cells, etc.), what is crucial for proper trafficking of these cells during organogenesis. Furthermore, the potential deregulation of PAX genes in tumor cells leads to overexpression of CXCR4, enhanced responsiveness to SDF-1 and metastasis.