Alveolar rhabdomyosarcoma (aRMS) is an aggressive sarcoma of skeletal muscle characterized by expression of the paired box 3-forkhead box protein O1 (PAX3-FOXO1) fusion oncogene. Despite its discovery nearly two decades ago, the mechanisms by which PAX3-FOXO1 drives tumor development are not well characterized. Previously, we reported that PAX3-FOXO1 supports aRMS initiation by enabling bypass of cellular senescence checkpoints. We have now found that this bypass occurs in part through PAX3-FOXO1-mediated upregulation of RASSF4, a Ras-association domain family (RASSF) member. RASSF4 expression was upregulated in PAX3-FOXO1-positive aRMS cell lines and tumors. Enhanced RASSF4 expression promoted cell cycle progression, senescence evasion, and tumorigenesis through inhibition of the Hippo pathway tumor suppressor MST1. We also found that the downstream Hippo pathway target Yes-associated protein 1 (YAP), which is ordinarily restrained by Hippo signaling, was upregulated in RMS tumors. These data suggest that Hippo pathway dysfunction promotes RMS. This work provides evidence for Hippo pathway suppression in aRMS and demonstrates a progrowth role for RASSF4. Additionally, we identify a mechanism used by PAX3-FOXO1 to inhibit MST1 signaling and promote tumorigenesis in aRMS.