Rhabdomyosarcomas (RMS) are the most frequent soft-tissue sarcoma in children and characteristically show features of developing skeletal muscle. The alveolar subtype is frequently associated with a PAX3-FOXO1 fusion protein that is known to contribute to the undifferentiated myogenic phenotype of RMS cells. Histone methylation of lysine residues controls developmental processes in both normal and malignant cell contexts. Here we show that JARID2, which encodes a protein known to recruit various complexes with histone-methylating activity to their target genes, is significantly overexpressed in RMS with PAX3-FOXO1 compared with the fusion gene-negative RMS (t-test; P < 0.0001). Multivariate analyses showed that higher JARID2 levels are also associated with metastases at diagnosis, independent of fusion gene status and RMS subtype (n = 120; P = 0.039). JARID2 levels were altered by silencing or overexpressing PAX3-FOXO1 in RMS cell lines with and without the fusion gene, respectively. Consistent with this, we demonstrated that JARID2 is a direct transcriptional target of the PAX3-FOXO1 fusion protein. Silencing JARID2 resulted in reduced cell proliferation coupled with myogenic differentiation, including increased expression of Myogenin (MYOG) and Myosin Light Chain (MYL1) in RMS cell lines representative of both the alveolar and embryonal subtypes. Induced myogenic differentiation was associated with a decrease in JARID2 levels and this phenotype could be rescued by overexpressing JARID2. Furthermore, we that showed JARID2 binds to and alters the methylation status of histone H3 lysine 27 in the promoter regions of MYOG and MYL1 and that the interaction of JARID2 at these promoters is dependent on EED, a core component of the polycomb repressive complex 2 (PRC2). Therefore, JARID2 is a downstream effector of PAX3-FOXO1 that maintains an undifferentiated myogenic phenotype that is characteristic of RMS. JARID2 and other components of PRC2 may represent novel therapeutic targets for treating RMS patients.