ABSTRACT: Rhabdomyosarcoma (RMS), a malignancy of impaired myogenic differentiation, is the most common soft tissue pediatric cancer. PAX3-FOXO1 oncofusions drive the majority of the clinically more aggressive fusion-positive rhabdomyosarcoma (FP-RMS). Recent studies have established an epigenetic basis for PAX3-FOXO1-driven oncogenic processes. However, details of PAX3-FOXO1 epigenetic mechanisms, including interactions with, and dependence on, other chromatin and transcription factors, are incompletely understood. We previously identified a novel disease-promoting epigenetic axis in RMS, involving the histone demethylase KDM3A and the ETS1 transcription factor, and demonstrated that this epigenetic axis interfaces with PAX3-FOXO1 both phenotypically and transcriptomically, including co-regulation of biological processes and genes important to FP-RMS progression. In this study, we demonstrate that KDM3A and ETS1 colocalize with PAX3-FOXO1 to enhancers of important disease-promoting genes in FP-RMS, including FGF8, IL4R, and MEST, as well as PODXL, which we define herein as a new FP-RMS-promoting gene. We show that ETS1, which is induced by both PAX3-FOXO1 and KDM3A, exists in complex with PAX3-FOXO1, and augments PAX3-FOXO1 chromatin occupancy. We further show that the PAX3-FOXO1/ETS1 complex can be disrupted by the clinically relevant small molecule inhibitor YK-4-279. YK-4-279 displaces PAX3-FOXO1 from chromatin and interferes with PAX3-FOXO1-dependent gene regulation, resulting in potent inhibition of growth and invasive properties in FP-RMS, along with downregulation of FGF8, IL4R, MEST and PODXL expression. We additionally show that, in some FP-RMS, KDM3A also increases PAX3-FOXO1 levels. Together, our studies illuminate mechanisms of action of the KDM3A/ETS1 regulatory module, and reveal novel targetable mechanisms of PAX3-FOXO1 chromatin complex regulation, in FP-RMS.