Alveolar soft part sarcoma is a rare neoplasm usually arising in the soft tissues of the lower limbs in adults and in the head and neck region in children. It presents primarily as a slowly growing mass or as metastatic disease. It is characterized by a specific chromosomal alteration, der(17)t(X:17)(p11:q25), resulting in fusion of the transcription factor E3 (TFE3) with alveolar soft part sarcoma critical region 1 (ASPSCR1) at 17q25. This translocation is diagnostically useful because the tumor nuclei are positive for TFE3 by immunohistochemistry. Real-time polymerase chain reaction to detect the ASPSCR1-TFE3 fusion transcript on paraffin-embedded tissue blocks has been shown to be more sensitive and specific than detection of TFE3 by immunohistochemical stain. Cathepsin K is a relatively recent immunohistochemical stain that can aid in the diagnosis. The recent discovery of the role of the ASPSCR1-TFE3 fusion protein in the MET proto-oncogene signaling pathway promoting angiogenesis and cell proliferation offers a promising targeted molecular therapy.