Several genes encoding DNA repair molecules have been proposed as cancer-susceptibility genes. Many studies have suggested that SNPs in XRCC4 could be implicated in altering the risk of prostate cancer (PCa). We examined the role of the functional variant (-652T>G) in the XRCC4 promoter in PCa. The transcriptional activity of XRCC4 gene was measured by luciferase assay. We performed real-time PCR/immunohistochemical assay to verify the association between expression level of XRCC4 mRNA/protein and XRCC4 -652T>G polymorphism. In addition, electrophoretic mobility shift assay (EMSA) was used to confirm whether this polymorphism has an effect on binding ability of the transcription factor. We found that the G variant significantly increased the transcription activity of the XRCC4 gene and the binding ability of transcriptional factor GATA-1 to the XRCC4 promoter. Furthermore, the results suggested that the XRCC4 protein and mRNA were overexpressed in individuals who carried the -652G allele compared to carriers of the -652T allele. In addition, the expression of XRCC4 in PCa tissues was lower than in adjacent normal tissues. Our data suggest that the XRCC4 promoter -652G>T polymorphism is functional and may influence genetic susceptibility to prostate cancer. Case-control studies are required to validate our findings in the future.