A stem cell model is presented for the organization of the prostatic epithelium that may explain normal and abnormal growth in the human prostate. This model is based on recent data indicating that: 1) The three basic cell types encountered in the prostatic epithelium--i.e., secretory luminal, basal, and endocrine paracrine (EP) cells--are linked in the precursor progeny relationship. 2) The proliferative compartment of the normal and hyperplastic epithelium is located in the basal cell layer. 3) The proliferative compartment of the prostatic epithelium is androgen-independent but contains andro-responsive target cells. 4) During the malignant transformation of the prostatic epithelium, the proliferative zone is inverted and shifts to luminal cell types. 5) Formation of neoplastic basement membrane (BM) material is crucial for the development of the invasive phenotype in prostate cancer. 6) The proliferative activities in prostate cancer are exclusively restricted to exocrine cell types, whereas endocrine differentiated tumor cells are postmitotic cells. 7) The majority of exocrine tumor cells are androgen-responsive in contrast to endocrine differentiated cell types that consistently lack the nuclear androgen receptor (AR). In this model, a small stem cell population located in the basal cell layer gives rise to all epithelial cell lineages encountered in the normal, hyperplastic, and neoplastic prostate. The differentiating process from basal cells to secretory luminal cells via intermediate phenotypes is induced by circulating androgens, and largely depends on the presence of androgen-responsive target cells in the basal cell layer. Accordingly, the abnormal growth of the secretory epithelium in benign prostate hyperplasia (BPH) may be related to an increase in the total number of androgen-responsive basal cells in the proliferative compartment. Prostate cancer derives from transformed stem cells located in the basal cell layer that acquire secretory luminal characteristics under androgenic stimulation. During tumor invasion, the malignant phenotypes adhere via specific receptors to newly formed BM-material, which, in turn, may facilitate their passage through the extracellular matrix. The occurrence of endocrine differentiation in prostate cancer reflects the pluripotency of its stem cells. The widespread absence of nuclear AR in endocrine differentiated tumor cells clearly indicates that this phenotype belongs to those cell clones in prostate cancer, that are initially androgen-independent and refractory to hormonal therapy. Accordingly, the progressive emergence of endocrine cell clones during tumor progression may represent one mechanism by which prostate cancer cells escape hormonal control.