Luminal cells are believed to be the cells of origin for human prostate cancer, because the disease is characterized by luminal cell expansion and the absence of basal cells. Yet functional studies addressing the origin of human prostate cancer have not previously been reported because of a lack of relevant in vivo human models. Here we show that basal cells from primary benign human prostate tissue can initiate prostate cancer in immunodeficient mice. The cooperative effects of AKT, ERG, and androgen receptor in basal cells recapitulated the histological and molecular features of human prostate cancer, with loss of basal cells and expansion of luminal cells expressing prostate-specific antigen and alpha-methylacyl-CoA racemase. Our results demonstrate that histological characterization of cancers does not necessarily correlate with the cellular origins of the disease.