Alveolar soft part sarcoma (ASPS), a deadly soft tissue malignancy with a predilection for adolescents and young adults, associates consistently with t(X;17) translocations that generate the fusion gene ASPSCR1-TFE3. We proved the oncogenic capacity of this fusion gene by driving sarcomagenesis in mice from conditional ASPSCR1-TFE3 expression. The completely penetrant tumors were indistinguishable from human ASPS by histology and gene expression. They formed preferentially in the anatomic environment highest in lactate, the cranial vault, expressed high levels of lactate importers, harbored abundant mitochondria, metabolized lactate as a metabolic substrate, and responded to the administration of exogenous lactate with tumor cell proliferation and angiogenesis. These data demonstrate lactate's role as a driver of alveolar soft part sarcomagenesis.