Alveolar rhabdomyosarcoma (ARMS) is an aggressive childhood cancer of striated muscle characterized by the presence of the PAX3-FOXO1A or PAX7-FOXO1A chimeric oncogenic transcription factor. Identification of their targets is essential for understanding ARMS pathogenesis. To this aim, we analyzed transcriptomic data from rhabdomyosarcoma samples and found that P-cadherin expression is correlated with PAX3/7-FOXO1A presence. We then show that expression of a PAX3 dominant negative variant inhibits P-cadherin expression in ARMS cells. Using mouse models carrying modified Pax3 alleles, we demonstrate that P-cadherin is expressed in the dermomyotome and lies genetically downstream from the myogenic factor Pax3. Moreover, in vitro gel shift analysis and chromatin immunoprecipitation indicate that the P-cadherin gene is a direct transcriptional target for PAX3/7-FOXO1A. Finally, P-cadherin expression in normal myoblasts inhibits myogenesis and induces myoblast transformation, migration and invasion. Conversely, P-cadherin downregulation by small hairpin RNA decreases the transformation, migration and invasive potential of ARMS cells. P-cadherin also favors cadherin switching, which is a hallmark of metastatic progression, by controlling N- and M-cadherin expression and/or localization. Our findings demonstrate that P-cadherin is a direct PAX3-FOXO1A transcriptional target involved in ARMS aggressiveness. Therefore, P-cadherin emerges as a new and attractive target for therapeutic intervention in ARMS.