The prostate-specific gene, TMPRSS2 is fused with the gene for the transcription factor ERG in a large proportion of human prostate cancers. The prognostic significance of the presence of the TMPRSS2:ERG gene fusion product remains controversial. We examined prostate cancer specimens from 165 patients who underwent surgery for clinically localised prostate cancer between 1998 and 2006. We tested for the presence of TMPRSS2:ERG gene fusion product, using RT-PCR and direct sequencing. We conducted a survival analysis to determine the prognostic significance of the presence of the TMPRSS2:ERG fusion gene on the risk of prostate cancer recurrence, adjusting for the established prognostic factors. We discovered that the fusion gene was expressed within the prostate cancer cells in 81 of 165 (49.1%) patients. Of the 165 patients, 43 (26.1%) developed prostate-specific antigen (PSA) relapse after a mean follow-up of 28 months. The subgroup of patients with the fusion protein had a significantly higher risk of recurrence (58.4% at 5 years) than did patients who lacked the fusion protein (8.1%, P<0.0001). In a multivariable analysis, the presence of gene fusion was the single most important prognostic factor; the adjusted hazard ratio for disease recurrence for patients with the fusion protein was 8.6 (95% CI=3.6-20.6, P<0.0001) compared to patients without the fusion protein. Among prostate cancer patients treated with surgery, the expression of TMPRSS2:ERG fusion gene is a strong prognostic factor and is independent of grade, stage and PSA level.