A PCR-based subtractive hybridisation technique was used to identify genes involved in stromal-epithelial interactions in prostate cancer. Eight genes were identified as being differentially expressed in benign prostatic fibroblast cells after stimulation with tumourigenic LNCaP conditioned media. One of these genes, protein tyrosine phosphatase CAAX2 (PTPCAAX2; also described as PTP4A and OV-1), has recently been shown to be oncogenic in hamster pancreatic epithelial cells. We show that PTPCAAX2 expression is up-regulated 4-fold in benign prostatic fibroblast cells 24 h after stimulation with LNCaP conditioned media and up-regulated 9-fold in prostatic tumour fibroblast cells. PTPCAAX2 overexpression was also detected in both androgen-dependent and androgen-independent prostate cancer cell lines and prostate tumour tissue, as determined by RT-PCR analysis and in situ hybridisation. These observations of PTPCAAX2 overexpression in prostate tumour cells and tissue suggest that PTPCAAX2 may potentially function as an oncogene in prostate cancer.