Androgen receptor (AR) is a member of the steroid receptor superfamily that may require coactivators for proper or maximal transactivation. Using a yeast two-hybrid screening followed by mammalian cell analyses, we identified a novel ligand-dependent AR-associated protein, ARA54, which consists of 474 amino acids with a molecular mass of 54 kDa. We demonstrated that ARA54 might function as a preferential coactivator for AR-mediated transactivation in human prostate cancer DU145 cells. Interestingly, our data also showed that ARA54 could significantly enhance the transcriptional activity of LNCaP mutant AR (ARt877a) but not wild type AR or another mutant AR (ARe708k) in the presence of 10 nM 17beta-estradiol or 1 microM hydroxyflutamide. These results imply that both ARA54 and the positions of the AR mutation (877 versus 708) might contribute to the specificity of AR-mediated transactivation. Our findings further demonstrated that the C-terminal domain of ARA54 can serve as a dominant negative inhibitor and exogenous full-length ARA54 can reverse this squelching effect on AR transcriptional activity. Co-expression of ARA54 with other AR coactivators, such as ARA70 or SRC-1, showed additive stimulation of AR-mediated transactivation, which indicates that these cofactors may function individually as AR coactivators to induce AR target gene expression. Through our findings, we have identified and characterized a novel AR coactivator, ARA54, which may play an important role in the AR signaling pathway in human prostate.