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Rhabdomyosarcoma is the most commonly occurring soft-tissue sarcoma in childhood. Most rhabdomyosarcoma falls into one of two biologically distinct subgroups represented by alveolar or embryonal histology. The alveolar subtype harbors a translocation-mediated PAX3:FOXO1A fusion gene and has an extremely poor prognosis. However, tumor cells have heterogeneous expression for the fusion gene. Using a conditional genetic mouse model as well as human tumor cell lines, we show that that Pax3:Foxo1a expression is enriched in G2 and triggers a transcriptional program conducive to checkpoint adaptation under stress conditions such as irradiation in vitro and in vivo. Pax3:Foxo1a also tolerizes tumor cells to clinically-established chemotherapy agents and emerging molecularly-targeted agents. Thus, the surprisingly dynamic regulation of the Pax3:Foxo1a locus is a paradigm that has important implications for the way in which oncogenes are modeled in cancer cells.