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The role of Notch signaling in prostate cancer has not been defined definitively. Several large scale tissue microarray studies have revealed that the expression of some Notch signaling components including the Jagged1 ligand are upregulated in advanced human prostate cancer specimens. Jagged1 expressed by tumor cells may activate Notch signaling in both adjacent tumor cells and cells in tumor microenvironment. However, it remains undetermined whether increased Jagged1 expression reflects a cause for or a consequence of tumor progression in vivo. To address this question, we generated a novel R26-LSL-JAG1 mouse model that enables spatiotemporal Jagged1 expression. Prostate specific upregulation of Jagged1 neither interferes with prostate epithelial homeostasis nor significantly accelerates tumor initiation or progression in the prostate-specific Pten deletion mouse model for prostate cancer. However, Jagged1 upregulation results in increased inflammatory foci in tumors and incidence of intracystic adenocarcinoma. In addition, Jagged1 overexpression upregulates Tgfβ signaling in prostate stromal cells and promotes progression of a reactive stromal microenvironment in the Pten null prostate cancer model. Collectively, Jagged1 overexpression does not significantly accelerate prostate cancer initiation and progression in the context of loss-of-function of Pten, but alters tumor histopathology and microenvironment. Our study also highlights an understudied role of Notch signaling in regulating prostatic stromal homeostasis.