TMPRSS2-ERG gene fusions are the predominant molecular subtype of prostate cancer. Here, we explored the role of TMPRSS2-ERG gene fusion product using in vitro and in vivo model systems. Transgenic mice expressing the ERG gene fusion product under androgen-regulation develop mouse prostatic intraepithelial neoplasia (PIN), a precursor lesion of prostate cancer. Introduction of the ERG gene fusion product into primary or immortalized benign prostate epithelial cells induced an invasion-associated transcriptional program but did not increase cellular proliferation or anchorage-independent growth. These results suggest that TMPRSS2-ERG may not be sufficient for transformation in the absence of secondary molecular lesions. Transcriptional profiling of ERG knockdown in the TMPPRSS2-ERG-positive prostate cancer cell line VCaP revealed decreased expression of genes over-expressed in prostate cancer versus PIN and genes overexpressed in ETS-positive versus -negative prostate cancers in addition to inhibiting invasion. ERG knockdown in VCaP cells also induced a transcriptional program consistent with prostate differentiation. Importantly, VCaP cells and benign prostate cells overexpressing ERG directly engage components of the plasminogen activation pathway to mediate cellular invasion, potentially representing a downstream ETS target susceptible to therapeutic intervention. Our results support previous work suggesting that TMPRSS2-ERG fusions mediate invasion, consistent with the defining histologic distinction between PIN and prostate cancer.