Stromal–epithelial interaction is crucial to mediate normal prostate and prostate cancer (PCa) development. The indispensable roles of mesenchymal/stromal androgen receptor (AR) for the prostate organogenesis have been demonstrated by using tissue recombination from wild‐type and testicular feminized mice. However, the stromal AR functions in the tumour microenvironment and the underlying mechanisms governing the interactions between the epithelium and stroma are not completely understood. Here, we have established the first animal model with AR deletion in stromal fibromuscular cells (dARKO, AR knockout in fibroblasts and smooth muscle cells) in the Pten^+/− mouse model that can spontaneously develop prostatic intraepithelial neoplasia (PIN). We found that loss of stromal fibromuscular AR led to suppression of PIN lesion development with alleviation of epithelium proliferation and tumour‐promoting microenvironments, including extracellular matrix (ECM) remodelling, immune cell infiltration and neovasculature formation due, in part, to the modulation of pro‐inflammatory cytokines/chemokines. Finally, targeting stromal fibromuscular AR with the AR degradation enhancer, ASC‐J9®, resulted in the reduction of PIN development/progression, which might provide a new approach to suppress PIN development.