Cancer stem cells (CSCs) have been identified in a number of solid tumors, but not yet in rhabdomyosarcoma (RMS), the most frequently occurring soft tissue tumor in childhood. Hence, the aim of this study was to identify and characterize a CSC population in RMS using a functional approach. We found that embryonal rhabdomyosarcoma (eRMS) cell lines can form rhabdomyosarcoma spheres (short rhabdospheres) in stem cell medium containing defined growth factors over several passages. Using an orthotopic xenograft model, we demonstrate that a 100 fold less sphere cells result in faster tumor growth compared to the adherent population suggesting that CSCs were enriched in the sphere population. Furthermore, stem cell genes such as oct4, nanog, c-myc, pax3 and sox2 are significantly upregulated in rhabdospheres which can be differentiated into multiple lineages such as adipocytes, myocytes and neuronal cells. Surprisingly, gene expression profiles indicate that rhabdospheres show more similarities with neuronal than with hematopoietic or mesenchymal stem cells. Analysis of these profiles identified the known CSC marker CD133 as one of the genes upregulated in rhabdospheres, both on RNA and protein levels. CD133+ sorted cells were subsequently shown to be more tumorigenic and more resistant to commonly used chemotherapeutics. Using a tissue microarray (TMA) of eRMS patients, we found that high expression of CD133 correlates with poor overall survival. Hence, CD133 could be a prognostic marker for eRMS. These experiments indicate that a CD133+ CSC population can be enriched from eRMS which might help to develop novel targeted therapies against this pediatric tumor.