Embryonal rhabdomyosarcomas (ERMSs) show elevated levels of PAX7, a transcription factor that marks quiescent adult muscle stem (satellite) cells and is important for proliferation and survival of activated satellite cells and whose timely repression is required for myogenic differentiation. However, the mechanism of PAX7 accumulation in ERMSs and whether high PAX7 causes uncontrolled proliferation in ERMS remains to be elucidated. The receptor for advanced glycation end-products (RAGE, encoded by AGER) transduces a myogenic and anti-proliferative signal in myoblasts, and stable transfection of the ERMS cell line TE671, which does not express RAGE, with AGER results in reduced proliferation and formation of tumor masses in vivo, and enhanced apoptosis and myogenic differentiation. Herein, we show that RAGE expression is low or absent in human ERMSs. We also show that in ERMS cells (1) PAX7 accumulates owing to absent or low RAGE signaling; (2) elevated PAX7 levels reduce RAGE expression and levels of MyoD and myogenin, muscle-specific transcription factors required for myoblast proliferation arrest and differentiation, respectively; (3) PAX7 supports myoblast proliferation by reducing the levels of MyoD, primarily by promoting its degradation; and (4), when ectopically expressed in ERMS cells, that RAGE upregulates myogenin which upregulates MyoD and downregulates PAX7, with consequent inhibition of proliferation and stimulation of differentiation. Thus, failure to express RAGE and, hence, MyoD and myogenin above a critical level in ERMS cells might result in deregulated PAX7 expression leading to uncontrolled proliferation and, potentially, to rhabdomyosarcomagenesis.