Deciphering the ways in which somatic mutations and germline susceptibility variants cooperate to promote cancer is challenging. Ewing sarcoma is characterized by fusions between EWSR1 and members of the ETS gene family, usually EWSR1-FLI1, leading to the generation of oncogenic transcription factors that bind DNA at GGAA motifs. A recent genome-wide association study identified susceptibility variants near EGR2. Here we found that EGR2 knockdown inhibited proliferation, clonogenicity and spheroidal growth in vitro and induced regression of Ewing sarcoma xenografts. Targeted germline deep sequencing of the EGR2 locus in affected subjects and controls identified 291 Ewing-associated SNPs. At rs79965208, the A risk allele connected adjacent GGAA repeats by converting an interspaced GGAT motif into a GGAA motif, thereby increasing the number of consecutive GGAA motifs and thus the EWSR1-FLI1-dependent enhancer activity of this sequence, with epigenetic characteristics of an active regulatory element. EWSR1-FLI1 preferentially bound to the A risk allele, which increased global and allele-specific EGR2 expression. Collectively, our findings establish cooperation between a dominant oncogene and a susceptibility variant that regulates a major driver of Ewing sarcomagenesis.