Understanding prostate stem cells (PSCs) may provide insight for the design of therapeutics for prostate cancer. We have developed a quantitative in vivo colony-forming assay and have demonstrated that the Sca-1 antigen is present on the surface of a prostate cell subpopulation that possesses multiple stem cell properties. Immunofluorescent analysis demonstrates that Sca-1 is expressed by both basal and luminal cells in the proximal region of the adult prostate, but is not expressed by either lineage in more distal regions. The proximal region has been suggested as the PSC niche based on BrdU label-retention studies and the presence of distinct smooth-muscle cells that produce high levels of TGF-beta. Sca-1 is also expressed by nearly all cells within fetal prostate epithelial chords, suggesting Sca-1 may be conserved on PSCs throughout development. Malignant epithelial cells from TRAMP mice, as well as normal prostate cells with lentiviral-mediated alteration of the PTEN/AKT signaling pathway, give rise to PIN lesions and prostate cancer in vivo. Alteration of PTEN/AKT signaling in Sca-1-enriched PSCs also results in PIN lesions, suggesting that PSCs can serve as one target for prostate carcinogenesis.