Rhabdomyosarcoma (RMS) is the most common soft-tissue sarcoma in children with an annual incidence of five new cases per million. Alveolar rhabdomyosarcoma (ARMS) is characterized by the t(2;13) or t(1;13) chromosomal translocations, which generate the PAX3-FOXO1 or PAX7-FOXO1 fusion genes, respectively. The oncogenic activity of PAX3-FOXO1 has been demonstrated in vitro and in vivo, yet expression of the fusion protein alone in primary myoblasts or a mouse model is insufficient for tumorigenic transformation. To identify genes cooperating with PAX3-FOXO1 in ARMS tumorigenesis, we generated a retroviral complementary DNA (cDNA) expression library from the Rh30 ARMS cell line. Arf-/- myoblasts expressing PAX3-FOXO1 and the retroviral cDNA library rapidly formed tumors after subcutaneous injection into NOD-SCID mice. Tumors formed by Arf-/-/PAX3-FOXO1/MarX-library myoblasts contained an unknown cDNA, encoding the C-terminus of the Homo sapiens hypothetical protein, FLJ10404, herein named IRIZIO. Expression of full length IRIZIO cDNA also cooperated with PAX3-FOXO1 in the transformation of Arf-/- myoblasts. Given that IRIZIO is expressed at increased levels in RMS, it might contribute to rhabdomyosarcomagenesis in humans.