Prevailing theories suggest that luminal cells are the origin of prostate cancer because it is histologically defined by basal cell loss and malignant luminal cell expansion. We introduced a series of genetic alterations into prospectively identified populations of murine basal/stem and luminal cells in an in vivo prostate regeneration assay. Stromal induction of FGF signaling, increased expression of the ETS family transcription factor ERG1, and constitutive activation of PI3K signaling were evaluated. Combination of activated PI3K signaling and heightened androgen receptor signaling, which is associated with disease progression to androgen independence, was also performed. Even though luminal cells fail to respond, basal/stem cells demonstrate efficient capacity for cancer initiation and can produce luminal-like disease characteristic of human prostate cancer in multiple models. This finding provides evidence in support of basal epithelial stem cells as one target cell for prostate cancer initiation and demonstrates the propensity of primitive cells for tumorigenesis.