Abstract Rhabdomyosarcoma (RMS) is the most common soft tissue sarcoma in children. Despite aggressive treatment clinical outcomes for RMS have not improved for three decades, emphasizing the need to uncover the molecular underpinnings of the disease. RMS has been presumed to originate from derailed muscle progenitors based on the histologic appearance and gene expression pattern of the tumors resembling embryonic developing skeletal muscle. However, an origin restricted to skeletal muscle does not explain RMS occurring in tissues devoid of skeletal muscle such as the prostate, bladder, and salivary gland. Previously, we described that activation of Sonic Hedgehog signaling through expression of a conditional, constitutively active Smoothened allele, SmoM2, under control of a presumed adipocyte-restricted adipose protein 2 (aP2)-Cre recombinase transgene in mice gives rise to aggressive skeletal muscle tumors. These tumors display the histologic and molecular characteristics of human embryonal fusion-negative RMS (FN-RMS). This model suggested a potential non-myogenic origin of FN-RMS and an avenue to explain FN-RMS development in anatomic sites devoid of skeletal muscle. Lineage tracing showed that RMS can originate from cell reprogramming and transdifferentiation of endothelial progenitor cells. Hedgehog pathway activation in committed endothelial progenitors results in Tbx1 expression and subsequent Myod1 expression driving a partially myogenic program characteristic of FN-RMS. Our work identifies reprogramming cell fate as a mechanism of transformation in pediatric sarcoma and illustrates that it is dangerous to assume the cell of origin from the characteristics of the tumor cell. The cell-reprogramming mechanism that shifts endothelial progenitors to muscle-like cells provides a unique system to define the core regulatory circuitry controlling RMS cell fate and to determine in vivo if targeting this network is a therapeutic vulnerability. Genomic profiling of human FN-RMS failed to uncover a unique mutation that drives oncogenesis. However, the PTEN cis-regulatory region is hypermethylated in more than 90% of all human FN-ERMS tumors, resulting in decreased expression. However, inhibiting the PI3K/AKT/mTOR pathway has had varied efficacy in RMS. In our RMS mouse model, PTEN localizes to the cytoplasm and nucleus, suggesting that PTEN could have functions other than regulating the PI3K/AKT/mTOR pathway. We demonstrate that Pten loss cooperates in RMS tumorigenesis and results in tumors more reflective of human FN-RMS. We show that Pten loss drives expression of the transcription factor PAX7 and identified PAX7 as a dependency in human FN-RMS. Furthermore, Pax7 deletion completely rescues the deleterious effects of Pten loss but also alters tumor cell fate, giving rise to a smooth muscle tumor. Thus, PTEN loss drives the expression of PAX7, a key member of the RMS core regulatory circuitry dictating tumor cell fate. This highlights a synthetic essential relationship between PTEN and PAX7 in FN-RMS tumor maintenance and tumor-fate decisions. Citation Format: Mark E. Hatley, Casey G. Langdon, Katherine E. Gadek, Matthew R. Garcia, Catherine J. Drummond, Jason A. Hanna, Hongjian E. Jin, Jerold E. Rehg. Rhabdomyosarcoma: visions through the looking glass [abstract]. In: Proceedings of the AACR Special Conference: Sarcomas; 2022 May 9-12; Montreal, QC, Canada. Philadelphia (PA): AACR; Clin Cancer Res 2022;28(18_Suppl):Abstract nr IA013.