Versican, one of the key components of prostatic stroma, plays a central role in tumor initiation and progression. Here, we investigated promoter elements and mechanisms of androgen receptor (AR)-mediated regulation of the versican gene in prostate cancer cells. Using transient transfection assays in prostate cancer LNCaP and cervical cancer HeLa cells engineered to express the AR, we demonstrate that the synthetic androgen R1881 and dihydrotestosterone stimulate expression of a versican promoter-driven luciferase reporter vector (versican-Luc). Further, both basal and androgen-stimulated versican-Luc activities were significantly diminished in LNCaP cells, when AR gene expression was knocked down using a short hairpin RNA. Methylation-protection footprinting analysis revealed an AR-protected element between positions +75 and +102 of the proximal versican promoter, which strongly resembled a consensus steroid receptor element. Electrophoretic mobility shift and supershift assays revealed strong and specific binding of the recombinant AR DNA binding domain to oligonucleotides corresponding to this protected DNA sequence. Site-directed mutagenesis of the steroid receptor element site markedly diminished R1881-stimulated versican-Luc activity. In contrast to the response seen using LNCaP cells, R1881 did not significantly induce versican promoter activity and mRNA levels in AR-positive prostate stromal fibroblasts. Interestingly, overexpression of beta-catenin in the presence of androgen augmented versican promoter activity 10- and 30-fold and enhanced versican mRNA levels 2.8-fold in fibroblasts. In conclusion, we demonstrate that AR transactivates versican expression, which may augment tumor-stromal interactions and may contribute to prostate cancer progression.