Steroid sex hormones can induce prostate carcinogenesis, and are thought to contribute to the development of prostate cancer during aging. However, the mechanism for hormone-induced prostate carcinogenesis remains elusive. Here, we report that activating transcription factor 3 (ATF3)-a broad stress sensor-suppressed hormone-induced prostate carcinogenesis in mice. Although implantation of testosterone and estradiol (T+E2) pellets for 2 months in wild-type mice rarely induced prostatic intraepithelial neoplasia (PIN) in dorsal prostates (one out of eight mice), the loss of ATF3 led to the appearance of not only PIN but also invasive lesions in almost all examined animals. The enhanced carcinogenic effects of hormones on ATF3-deficient prostates did not appear to be caused by a change in estrogen signaling, but were more likely a consequence of elevated androgen signaling that stimulated differentiation of prostatic basal cells into transformation-preferable luminal cells. Indeed, we found that hormone-induced lesions in ATF3-knockout mice often contained cells with both basal and luminal characteristics, such as p63(+) cells (a basal-cell marker) showing luminal-like morphology, or cells double-stained with basal (CK5(+)) and luminal (CK8(+)) markers. Consistent with these findings, low ATF3 expression was found to be a poor prognostic marker for prostate cancer in a cohort of 245 patients. Our results thus support that ATF3 is a tumor suppressor in prostate cancer.