Fusion genes play important roles in tumorigenesis. The identification of the high-frequency TMPRSS2 fusion with ERG and other ETS family genes in prostate cancer highlights the importance of fusion genes in solid tumor development and progression. However, the mechanisms leading to these fusions are unclear. We investigated whether androgen, through stimulating its receptor, could promote spatial genome reorganization and contribute to the generation of the TMPRSS2:ERG fusion. We show that treatment with androgen can induce the TMPRSS2:ERG fusion in both malignant and nonmalignant prostate epithelial cells. Although the fusion could be detected in malignant cells following 24-hour treatment, prolonged exposure to androgen was required to detect the fusion transcript in nonmalignant cells. We associated the fusion incidence with genetic factors, including androgen-induced gene proximity, androgen receptor exon1 CAG repeat length and expression of the PIWIL1 gene. This study demonstrates that fusions can be induced prior to malignant transformation and generation of the fusion is associated with both gene proximity and loss of the ability to prevent double-strand breaks.