Prostate cancer is the second leading cause of cancer death in men, behind only lung cancer. In some cases, the proper diagnosis of prostatic neoplasia can be challenging, and the differential diagnosis includes atypical nonmalignant lesions such as atrophy, atypical adenomatous hyperplasia (AAH), and atypical small acinar proliferation (ASAP). Atrophy and AAH have a benign clinical outcome, and if detected on needle biopsy or transurethral resection of the prostate, clinical follow-up seems appropriate. In contrast, ASAP cannot be determined to be benign or malignant. In clinical practice, the diagnosis of ASAP is an indication for repeat biopsy because the chance of finding prostate adenocarcinoma is even greater than that with an earlier diagnosis of high-grade prostatic intraepithelial neoplasia. Malignant lesions require more restrictive treatment; therefore, differentiation among atrophy, AAH, ASAP, and adenocarcinoma is essential. We performed a systematic review of the current data allow to the creation of a diagnostic algorithm for atrophy, AAH, ASAP, and adenocarcinoma. We propose an algorithm that covers the practical issues related to interpretation of the biopsy findings and how to proceed further.