A model of human prostate cancer was established to study cellular interaction between prostate cancer and bone stroma in vivo. In this model, subcutaneous co‐injection of 2 non‐tumorigenic human cell lines‐LNCaP, a prostate cancer cell line, and MS, a bone stromal cell line‐into intact adult male mice resulted in formation of carcinomas that secreted prostate‐specific antigen (PSA), a clinically useful human serum prostate cancer marker. In castrated hosts, upon cellular interaction with bone fibroblasts, we observed the progression of these tumors from an androgen‐dependent (AD) to an androgen‐independent state (AI). We derived 4 LNCaP cell sublines from the chimeric LNCaP/MS tumors: the M subline from intact hosts and the C4, C4‐2 and C5 sublines from castrated hosts. The LNCaP sublines had chromosomal markers similar to those of the parental LNCaP cells and distinctly different from those of the MS bone stromal cell line. Although the parental and derived cell lines expressed similar steady‐state levels of orni‐thine decarboxylase transcript, the sublines expressed 5‐ to 10‐fold higher basal steady‐state levels of PSA transcript than did the parental LNCaP cell line. The LNCaP sublines formed 13‐ to 26‐fold more soft‐agar colonies than the parental LNCaP cell line. The sublines became tumorigenic, yielding an incidence of tumors in intact athymic mice of 7‐75%. The LNCaP sublines C4 and C5 (but not the parental and M cell line) formed tumors in castrated hosts when co‐injected with bone fibroblasts. A second‐generation LNCaP subline, C4‐2, was derived from a chimeric tumor induced by co‐inoculating castrated mouse with C4 cells and MS cells. We found that C4‐2 subline was tumorigenic when inoculated into castrated hosts in the absence of inductive fibroblasts. Moreover, C4‐2 was the only subline capable of forming soft‐agar colonies when cultured in serum‐free medium. In comparison with the parental LNCaP cells, the C4‐2 subline expressed lower steady‐state levels of androgen receptor (AR) protein and mRNA transcript and lost its androgen responsiveness in vitro. Our results suggest that certain genetic traits of prostate cancer cells may be selected or altered through an “adaptive” mechanism that involves cellular interaction with the bone stromal cells. © 1994 Wiley‐Liss, Inc.