The mechanisms by which prostate cancer (PCa) cells progress to a hormone refractory state are poorly understood. The progression process under androgen ablation conditions involves the survival of at least a portion of malignant cells and their eventual proliferation in an androgen-independent manner. The goal of this study was to investigate the role of PI3K signaling in such a progression. Using an in vitro model of androgen ablation, we show that after removal of androgen support, the human PCa cell line LNCaP initially arrested in G₁ and trans-differentiated into neuroendocrine-like cells that eventually resumed androgen-independent proliferation. Both acute and chronic androgen ablation resulted in an increase in basal levels of PI3K and Akt activity, which were sustained throughout the progression process. Under these conditions, inhibition of PI3K, pharmacologically or with ectopic expression of PTEN, arrested cell proliferation and blocked progression to the androgen-independent state. In contrast, LNCaP cells in the presence of androgens were marginally sensitive to PI3K inhibition. During the chronic stage of androgen deprivation, androgen-independent proliferation correlated with diminished p27^kip1 protein levels, whereas PI3K and Akt activity remained elevated. At this stage, PI3K inhibition rapidly triggered accumulation of p27^kip1, cell cycle arrest, and cell death. PI3K modulated p27^kip1 levels at least in part by regulating its rate of degradation. Taken together, these data show that androgen ablation alone can increase PI3K-Akt activation, which supports survival after acute androgen ablation and proliferation during chronic androgen deprivation. Successful progression to the androgen-independent state in the LNCaP cell line model requires intact PI3K signaling.