FGF receptor 3 (FGFR3) is activated by mutation or over-expression in many bladder cancers. Here, we identify an additional mechanism of activation via chromosomal re-arrangement to generate constitutively activated fusion genes. FGFR3–transforming acid coiled coil 3 (TACC3) fusions resulting from 4p16.3 re-arrangements and a t(4;7) that generates a FGFR3-BAI1-associated protein 2-like 1 (BAIAP2L1) fusion were identified in 4 of 43 bladder tumour cell lines and 2 of 32 selected tissue samples including the tumour from which one of the cell lines was derived. These are highly activated and transform NIH-3T3 cells. The FGFR3 component is identical in all cases and lacks the final exon that includes the phospholipase C gamma 1 (PLCγ1) binding site. Expression of the fusions in immortalized normal human urothelial cells (NHUC) induced activation of the mitogen-activated protein kinase pathway but not PLCγ1. A protein with loss of the terminal region alone was not as highly activated as the fusion proteins, indicating that the fusion partners are essential. The TACC3 fusions retain the TACC domain that mediates microtubule binding and the BAIAP2L1 fusion retains the IRSp53/MIM domain (IMD) that mediates actin binding and Rac interaction. As urothelial cell lines with FGFR3 fusions are extremely sensitive to FGFR-selective agents, the presence of a fusion gene may aid in selection of patients for FGFR-targeted therapy.