Prostate cancer is a leading and increasingly prevalent cause of cancer death in men. Whereas family history of disease is one of the strongest prostate cancer risk factors and suggests a hereditary component, the predisposing genetic factors remain unknown. We first showed that KLF6 is a tumor suppressor somatically inactivated in prostate cancer and since then, its functional loss has been further established in prostate cancer cell lines and other human cancers. Wild-type KLF6, but not patient-derived mutants, suppresses cell growth through p53-independent transactivation of p21. Here we show that a germline KLF6 single nucleotide polymorphism, confirmed in a tri-institutional study of 3,411 men, is significantly associated with an increased relative risk of prostate cancer in men, regardless of family history of disease. This prostate cancer–associated allele generates a novel functional SRp40 DNA binding site and increases transcription of three alternatively spliced KLF6 isoforms. The KLF6 variant proteins KLF6-SV1 and KLF6-SV2 are mislocalized to the cytoplasm, antagonize wtKLF6 function, leading to decreased p21 expression and increased cell growth, and are up-regulated in tumor versus normal prostatic tissue. Thus, these results are the first to identify a novel mechanism of self-encoded tumor suppressor gene inactivation and link a relatively common single nucleotide polymorphism to both regulation of alternative splicing and an increased risk in a major human cancer.