Rhabdomyosarcoma (RMS), a mesenchymal tumor occurring in the soft tissue of children, is associated with a defect in differentiation. This study unveils a novel anti-tumor mechanism of dimethylaminomicheliolide (DMAMCL), which is a water-soluble derivative of Micheliolide. First, we demonstrate that DMAMCL inhibits RMS cell growth without obvious cell death, leading to morphological alterations, enhanced expression of muscle differentiation markers, and a shift from a malignant to a more benign metabolic phenotype. Second, we detected decreased expression of DLL1 in RMS cells after DMAMCL treatment, known as a pivotal ligand in the Notch signaling pathway. Downregulation of DLL1 inhibits RMS cell growth and induces morphological changes similar to the effects of DMAMCL. Furthermore, DMAMCL treatment or loss of DLL1 expression also inhibits RMS xenograft tumor growth and augmented the expression of differentiation markers. Surprisingly, in C2C12 cells DMAMCL treatment or DLL1 downregulation also induces cell growth inhibition and an elevation in muscle differentiation marker expression. These data indicated that DMAMCL induced RMS differentiation and DLL1 is an important factor for RMS differentiation, opening a new window for the clinical use of DMAMCL as an agent for differentiation-inducing therapy for RMS treatment.