The aberrant expression of the transcription factors PAX3 and PAX3/FKHR associated with rhabdomyosarcoma (RMS), solid tumors displaying muscle cell features, suggests that these proteins play an important role in the pathogenesis of RMS. We could previously demonstrate that one of the oncogenic functions of PAX3 and PAX3/FKHR in RMS is protection from apoptosis. BCL-XL is a prominent anti-apoptotic protein present in normal skeletal muscle and RMS cells. In the present study, we establish that BCL-XL is transcriptionally modulated by PAX3 and PAX3/FKHR, since enhanced expression of both PAX proteins stimulates transcription of endogenous BCL-XL mRNA in a cell type specific manner. Further, we present evidence that both PAX3 and PAX3/FKHR can transcriptionally activate the Bcl-x gene promoter in cotransfection assays. Using electrophoretic mobility shift assays, an ATTA binding site for PAX3 and PAX3/FKHR could be localized in the upstream promoter region (position -42 to -39). Finally, ectopic overexpression of either PAX3, PAX3/FKHR or BCL-XL can rescue tumor cells from apoptosis induced by antisense treatment. These results suggest that at least part of the anti-apoptotic effect of PAX3 and PAX3/FKHR is mediated through direct transcriptional modulation of the prominent anti-apoptotic protein BCL-XL. Oncogene (2000).