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Tumor growth and relapse are often driven by cancer stem cells, but self-renewal mechanisms and genetic mutations that elevate their number are not fully understood. Here, we show that recurrent L122R mutation (Leucine to Argine change at amino acid 122) in the DNA-binding site of the Myogenic Differentiation 1 (MYOD1) transcription factor increases cancer stem cell frequency in aggressive Spindle cell/sclerosing rhabdomyosarcoma. MYOD1 also makes tumors resistant to chemotherapy and radiation. Epigenetic analysis reveals that MYOD1 binds MYC-like DNA recognition motifs to activate stem cell programs, while retaining some wild-type function to regulate muscle pathways that drive transformation. Mechanistically, MYOD1 transcriptionally activates Receptor tyrosine kinase-like Orphan Receptor 2 (ROR2) to turn on the non-canonical Wingless/Integrated (WNT) planar cell polarity pathway to increase both cancer stemness and therapy resistance. Targeting ROR2 with antibody-drug conjugates kills MYOD1-mutated tumor cells, offering therapeutic opportunities. These findings provide insights into how MYOD1 rewires rhabdomyosarcoma to a stem-like state and defines a unique class of oncogenic transcription factors found in aggressive cancers.