Rhabdomyosarcoma (RMS) is an aggressive pediatric cancer composed of myoblast-like cells. Recently, we discovered a unique muscle progenitor marked by the expression of the Twist2 transcription factor. Genomic analyses of 258 RMS patient tumors uncovered prevalent copy number amplification events and increased expression of in fusion-negative RMS. Knockdown of in RMS cells results in up-regulation of and a decrease in proliferation, implicating TWIST2 as an oncogene in RMS. Through an inducible Twist2 expression system, we identified Twist2 as a reversible inhibitor of myogenic differentiation with the remarkable ability to promote myotube dedifferentiation in vitro. Integrated analysis of genome-wide ChIP-seq and RNA-seq data revealed the first dynamic chromatin and transcriptional landscape of Twist2 binding during myogenic differentiation. During differentiation, Twist2 competes with MyoD at shared DNA motifs to direct global gene transcription and repression of the myogenic program. Additionally, Twist2 shapes the epigenetic landscape to drive chromatin opening at oncogenic loci and chromatin closing at myogenic loci. These epigenetic changes redirect MyoD binding from myogenic genes toward oncogenic, metabolic, and growth genes. Our study reveals the dynamic interplay between two opposing transcriptional regulators that control the fate of RMS and provides insight into the molecular etiology of this aggressive form of cancer.