Prostate cancer is a disease associated with androgens. It has been hypothesized that reducing the conversion of testosterone (T) to dihydrotestosterone (DHT) in the prostate by the use of the drug finasteride, a 5alpha-reductase inhibitor, will reduce the incidence of prostate cancer. We investigated the chemopreventive potential of finasteride by evaluating its effect on the prostate gland of men with elevated serum prostate-specific antigen (PSA). Fifty-two men with elevated PSA and prostate sextant biopsies negative for cancer were randomized to receive finasteride 5 mg day(-1) (27 patients) or no medication (25 patients) for 12 months and were rebiopsied at 12 months. The biopsies were evaluated for the presence of cancer, the proportion of glandular and hyperplastic tissue, and the presence of high-grade prostatic intraepithelial neoplasia (PIN). Epithelial proliferation was assessed in the prestudy and 12-month biopsies by immunohistochemistry using antibody to proliferating cell nuclear antigen (PCNA). Serum blood samples were drawn at baseline and after 1, 3, 6 and 12 months of study. In the control group, serum levels of PSA and T were unchanged throughout the 12 months. In the finasteride group, PSA decreased 48% (P < 0.001), DHT decreased 67% (P < 0.001) and T increased 21% (P < 0.001). Histological evaluation of prestudy and 12-month biopsy specimens revealed that the finasteride group had a 30% reduction in the percentage of hyperplastic epithelial tissue (P = 0.002), although this decrease was not statistically significantly different between the finasteride and control groups (P = 0.11). In patients with PIN on prestudy biopsy, no change occurred in the PIN lesions with finasteride treatment. Finasteride also had no effect on the proliferation index of prostatic epithelial cells. Of the 27 patients treated with finasteride, eight (30%) had adenocarcinoma of the prostate detected on the 12-month biopsy, compared with one (4%) of the control patients (P = 0.025). In the treatment group, six cancers occurred in the eight patients with PIN on the prestudy biopsy; in the observation group no cancers were detected in the five patients with PIN on the prestudy biopsy (P = 0.021). Two cancers occurred in the 19 men in the treatment group with no evidence of PIN on the prestudy biopsy, compared with one cancer in the 20 men in the observation group with no evidence of PIN on the prestudy biopsy (P = 0.60). This study, using a novel model for evaluating short-term efficacy of chemopreventive or therapeutic agents in men at high risk of prostate cancer, provides little evidence that finasteride is an effective chemopreventive agent for prostate cancer in men with elevated PSA.