The androgen signaling pathway, mediated through the androgen receptor (AR), is critical in prostate tumorigenesis. However, the precise role of AR in prostate cancer development and progression still remains largely unknown. Specifically, it is unclear whether overexpression of AR is sufficient to induce prostate tumor formation in vivo. Here, we inserted the human AR transgene with a LoxP-stop-loxP (LSL) cassette into the mouse ROSA26 locus, permitting "conditionally" activated AR transgene expression through Cre recombinase-mediated removal of the LSL cassette. By crossing this AR floxed strain with Osr1-Cre (odd skipped related) mice, in which the Osr1 promoter activates at embryonic day 11.5 in urogenital sinus epithelium, we generated a conditional transgenic line, R26hAR(loxP):Osr1-Cre+. Expression of transgenic AR was detected in both prostatic luminal and basal epithelial cells and is resistant to castration. Approximately one-half of the transgenic mice displayed mouse prostatic intraepithelial neoplasia (mPIN) lesions. Intriguingly, four mice (10%) developed prostatic adenocarcinomas, with two demonstrating invasive diseases. Positive immunostaining of transgenic AR protein was observed in the majority of atypical and tumor cells in the mPIN and prostatic adenocarcinomas, providing a link between transgenic AR expression and oncogenic transformation. An increase in Ki67-positive cells appeared in all mPIN and prostatic adenocarcinoma lesions of the mice. Thus, we demonstrated for the first time that conditional activation of transgenic AR expression by Osr1 promoter induces prostate tumor formation in mice. This new AR transgenic mouse line mimics the human disease and can be used for study of prostate tumorigenesis and drug development.