Androgen receptor (AR) is expressed in both stromal and epithelial cells of the prostate. The majority of studies on AR expression and function in prostate cancer is focused on malignant epithelial cells rather than stromal cells. In this study, we examined the levels of stromal AR in androgen-dependent and -independent prostate cancer and the function of stromal AR in prostate cancer growth and invasion. We showed that stromal AR levels were decreased in the areas surrounding cancerous tissue, especially in androgen-independent cancer. Using two telomerase-immortalized human stromal cell lines, one AR-positive and the other AR-negative, we demonstrated that stromal cells lacking AR stimulated cell proliferation of co-cultured prostate cancer cells in vitro and enhanced tumour growth in vivo when co-injected with PC3 epithelial cells in nude mice. In contrast, stromal cells expressing AR suppressed prostate cancer growth in vitro and in vivo. In parallel with cancer growth, in vitro invasion assays revealed that stromal cells lacking AR increased the invasion ability of PC3 cell by one order of magnitude, while stromal cells expressing AR reduced this effect. These results indicate a negative regulation of prostate cancer growth and invasion by stromal AR. This provides potentially new mechanistic insights into the failure of androgen ablation therapy, and the reactivation of stromal AR could be a novel therapeutic approach for treating hormone refractory prostate cancer.