Biphenotypic sinonasal sarcoma (SNS) is a low grade spindle cell sarcoma that affects middle-aged adults, in which the PAX3-MAML3 chimeric transcription factor induces an aberrant dual myogenic and neuroectodermal phenotype. We report an alternate PAX3-FOXO1 oncogenic fusion in SNS, confirming the crucial role of PAX3 in SNS oncogenesis. The presence of PAX3-FOXO1 in SNS and alveolar rhabdomyosarcoma suggests that these two entities are genetically similar lesions arising from distinct progenitor cell pools. This finding has important implications for the molecular diagnosis of SNS and alveolar rhabdomyosarcoma, and underscores the critical contribution of the cell of origin to the phenotype induced by oncogenic transcription factor reprogramming.