A valuable diagnostic adjunct and important prognostic parameter in alveolar rhabdomyosarcoma (ARMS) is the identification of translocations t(2;13)(q35;q14) and t(1;13)(p36;q14), and the associated PAX3-FKHR and PAX7-FKHR fusion transcripts, respectively. Most RMS fusion gene type studies have been based on reverse transcriptase-polymerase chain reaction (RT-PCR) detection of the fusion transcript, a technique limited by RNA quality and failure of devised primer sets to detect unusual variants. As an alternative approach, we developed a fluorescence in situ hybridization (FISH) assay that can: (1) distinguish between the two most common ARMS-associated fusion genes; (2) identify potential unusual variant translocations; (3) assess histologic components in mixed alveolar/embryonal RMS; and (4) be performed on paraffinized tissue. FISH analyses of 75 specimens (40 ARMS, 16 ERMS, 8 mixed ARMS/ERMS, and 11 non-RMS tumors) using selected cosmid clone, bacterial, P1-derived, and yeast artificial chromosome probe sets were successful in all but two cases. Among specimens with informative results for both FISH and RT-PCR or standard karyotyping, PAX/FKHR classification results were concordant in 94.6% (53/56). The three discordant cases included one exhibiting a t(2;13) by FISH that was subsequently confirmed by repeat RT-PCR, a second showing a rearrangement of the PAX3 locus only (consistent with the presence of a PAX3 variant translocation), and a third revealing a t(2;13) by FISH that lacked this translocation cytogenetically. Both alveolar and embryonal components of the mixed ARMS/ERMS subtype were negative for PAX3, PAX7, and FKHR rearrangements, a surprising finding confirmed by RT-PCR and/or conventional karyotyping. These data demonstrate that FISH with newly designed probe sets is a reliable and highly specific method of detecting t(1;13) and t(2;13) in routinely processed tissue and may be useful in differentiating ARMS from other small round cell tumors. The findings also suggest that FISH may be a more sensitive assay than RT-PCR in some settings, capable of revealing variant translocations.