Recently, we have shown that prostate epithelium–specific deficiency for p53 and Rb tumor suppressors leads to metastatic cancer, exhibiting features of both luminal and neuroendocrine differentiation. Using stage-by-stage evaluation of carcinogenesis in this model, we report that all malignant neoplasms arise from the proximal region of the prostatic ducts, the compartment highly enriched for prostatic stem/progenitor cells. In close similarity to reported properties of prostatic stem cells, the cells of the earliest neoplastic lesions express stem cell marker stem cell antigen 1 and are not sensitive to androgen withdrawal. Like a subset of normal cells located in the proximal region of prostatic ducts, the early neoplastic cells coexpress luminal epithelium markers cytokeratin 8, androgen receptor, and neuroendocrine markers synaptophysin and chromogranin A. Inactivation of p53 and Rb also takes place in the lineage-committed transit-amplifying and/or differentiated cells of the distal region of the prostatic ducts. However, the resulting prostatic intraepithelial neoplasms never progress to carcinoma by the time of mouse death. Interestingly, in an ectopic transplantation assay, early mutant cells derived from either region of the prostatic ducts are capable of forming neoplasms within 3 months. These findings indicate that p53 and Rb are critically important for the regulation of the prostatic stem cell compartment, the transformation in which may lead to particularly aggressive cancers in the context of microenvironment. [Cancer Res 2007;67(12):5683–90]