One of the most life‐threatening complications of prostate cancer is skeletal metastasis. In order to develop treatment for metastasis, it is important to understand its molecular mechanisms. Our work in this field has drawn parallels between hematopoietic stem cell and prostate cancer homing to the marrow. Our recent work demonstrated that annexin II expressed by osteoblasts and endothelial cells plays a critical role in niche selection. In this study, we demonstrate that annexin II and its receptor play a crucial role in establishing metastasis of prostate cancer. Prostate cancer cell lines migrate toward annexin II and the adhesion of prostate cancer to osteoblasts and endothelial cells was inhibited by annexin II. By blocking annexin II or its receptor in animal models, short‐term and long‐term localization of prostate cancers are limited. Annexin II may also facilitate the growth of prostate cancer in vitro and in vivo by the MAPK pathway. These data strongly suggest that annexin II and its receptor axis plays a central role in prostate cancer metastasis, and that prostate cancer utilize the hematopoietic stem cell homing mechanisms to gain access to the niche. J. Cell. Biochem. 105: 370–380, 2008. © 2008 Wiley‐Liss, Inc.