In human somatic tumorigenesis, mutations are thought to arise sporadically in individual cells surrounded by unaffected cells. This contrasts with most current transgenic models where mutations are induced synchronously in entire cell populations. Here we have modeled sporadic oncogene activation using a transgenic mouse in which c-MYC is focally activated in prostate luminal epithelial cells. Focal c-MYC expression resulted in mild pathology, but prostate-specific deletion of a single allele of the Pten tumor suppressor gene cooperated with c-MYC to induce high grade prostatic intraepithelial neoplasia (HGPIN)/cancer lesions. These lesions were in all cases associated with loss of Pten protein expression from the wild type allele. In the prostates of mice with concurrent homozygous deletion of Pten and focal c-MYC activation, double mutant (i.e. c-MYC+;Pten-null) cells were of higher grade and proliferated faster than single mutant (Pten-null) cells within the same glands. Consequently, double mutant cells outcompeted single mutant cells despite the presence of increased rates of apoptosis in the former. The p53 pathway was activated in Pten-deficient prostate cells and tissues, but c-MYC expression shifted the p53 response from senescence to apoptosis by repressing the p53 target gene p21^Cip1. We conclude that c-MYC overexpression and Pten deficiency cooperate to promote prostate tumorigenesis, but a p53-dependent apoptotic response may present a barrier to further progression. Our results highlight the utility of inducing mutations focally to model the competitive interactions between cell populations with distinct genetic alterations during tumorigenesis.