Phosphaturic mesenchymal tumours (PMTs) are uncommon soft tissue and bone tumours that typically cause hypophosphataemia and tumour-induced osteomalacia (TIO) through secretion of phosphatonins including fibroblast growth factor 23 (FGF23). PMT has recently been accepted by the World Health Organization as a formal tumour entity. The genetic basis and oncogenic pathways underlying its tumourigenesis remain obscure. In this study, we identified a novel FN1-FGFR1 fusion gene in three out of four PMTs by next-generation RNA sequencing. The fusion transcripts and proteins were subsequently confirmed with RT-PCR and western blotting. Fluorescence in situ hybridization analysis showed six cases with FN1-FGFR1 fusion out of an additional 11 PMTs. Overall, nine out of 15 PMTs (60%) harboured this fusion. The FN1 gene possibly provides its constitutively active promoter and the encoded protein's oligomerization domains to overexpress and facilitate the activation of the FGFR1 kinase domain. Interestingly, unlike the prototypical leukaemia-inducing FGFR1 fusion genes, which are ligand-independent, the FN1-FGFR1 chimeric protein was predicted to preserve its ligand-binding domains, suggesting an advantage of the presence of its ligands (such as FGF23 secreted at high levels by the tumour) in the activation of the chimeric receptor tyrosine kinase, thus effecting an autocrine or a paracrine mechanism of tumourigenesis.