Rhabdomyosarcoma (RMS) is the most frequent soft tissue sarcoma in children. Despite multiple attempts at intensifying chemotherapeutic approaches to treatment, only moderate improvements in survival have been made for patients with advanced disease. Retinoic acid is a differentiation agent that has shown some antitumor efficacy in RMS cells in vitro; however, the effects are of low magnitude. E-3-(4'-hydroxyl-3'-adamantylbiphenyl-4-yl) acrylic acid (ST1926) is a novel orally available synthetic atypical retinoid, shown to have more potent activity than retinoic acid in several types of cancer cells. We used in vitro and in vivo models of RMS to explore the efficacy of ST1926 as a possible therapeutic agent in this sarcoma. We found that ST1926 reduced RMS cell viability in all tested alveolar (ARMS) and embryonal (ERMS) RMS cell lines, at readily achievable micromolar concentrations in mice. ST1926 induced an early DNA damage response (DDR), which led to increase in apoptosis, in addition to S-phase cell cycle arrest and a reduction in protein levels of the cell cycle kinase CDK1. Effects were irrespective of TP53 mutational status. Interestingly, in ARMS cells, ST1926 treatment decreased PAX3-FOXO1 fusion oncoprotein levels, and this suppression occurred at a post-transcriptional level. In vivo, ST1926 was effective in inhibiting growth of ARMS and ERMS xenografts, and induced a prominent DDR. We conclude that ST1926 has preclinical efficacy against RMS, and should be further developed in this disease in clinical trials.