In the male Holtzman rat, in utero and lactational 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) exposure decreases prostate weight without inhibiting testicular androgen production or decreasing circulating androgen concentrations. Therefore, the present study sought to characterize effects of TCDD exposure on prostate development, from very early outgrowth from the urogenital sinus (Gestation Day [GD] 20) until rapid growth and differentiation are essentially complete (Postnatal Day [PND] 32). Pregnant Holtzman rats were administered a single dose of TCDD (1.0 microgram/kg po) or vehicle on GD 15 and offspring were exposed via placental transfer (GD 20 euthanasia) or placental and subsequent lactational transfer until euthanasia (if before PND 21) or weaning. Results show that the prostatic epithelial budding process was impaired by in utero TCDD exposure, as evidence by significant decreases in the number of buds emerging from dorsal, lateral, and ventral aspects of the GD 20 urogenital sinus. Ventral prostate cell proliferation index was significantly decreased on PND 1 but was similar to or higher than control at later times, whereas apoptosis was an extremely rare event in ventral prostates from both control and TCDD-exposed animals. Delays were noted in the differentiation of pericordal smooth muscle cells and luminal epithelial cells. In addition, ventral prostates from approximately 40% of TCDD-exposed animals examined on PNDs 21 and 32 exhibited alterations in the histological arrangement of cell types that could not be explained by a developmental delay. Compared to controls, these ventral prostates exhibited a disorganized, hyperplastic epithelium containing fewer luminal epithelial cells and an increased density or continuous layer of basal epithelial cells, as well as thicker periductal smooth muscle sheaths. In addition, in ventral prostates from TCDD-exposed animals, the intensity of androgen receptor staining was relatively low in the central and distal epithelium, and the number of androgen receptor-positive cells was relatively high in the periductal stroma. These data suggest that in utero and lactational TCDD exposure interferes with prostate development by decreasing very early epithelial growth, delaying cytodifferentiation, and, in the most severely affected animals, producing alterations in epithelial and stromal cell histological arrangement and the spatial distribution of androgen receptor expression that may be of permanent consequence.