Alveolar rhabdomyosarcoma (ARMS) is a highly aggressive pediatric soft-tissue sarcoma driven by fusion proteins. Despite intensive multimodal therapy, outcomes remain poor for patients with fusion-positive ARMS. This review integrates recent advances in the molecular pathogenesis of ARMS, highlighting key diagnostic and therapeutic targets. We discuss the central role of fusion proteins in transcriptional reprogramming, impaired myogenic differentiation, and super-enhancer activation. Emerging biomarkers (, , P-cadherin) and oncogenic kinases (Aurora A, , PLK1) are evaluated alongside receptor tyrosine kinases (, ) and transcription factors involved in metabolic rewiring (, ). Additionally, we examine immunotherapeutic strategies, epigenetic modifiers, and noncoding RNAs as potential therapeutic avenues. Together, these insights provide a comprehensive framework for developing biomarker-guided, multi-targeted therapies to improve outcomes in ARMS.