In this report, we describe the development of a transgenic mouse in which a rat probasin promoter (ARR2Pb) was used to direct prostate specific expression of a constitutively active form of signal transducer and activator of transcription 3 (i.e., Stat3C). ARR2Pb.Stat3C mice exhibited hyperplasia and prostate intraepithelial neoplasia (PIN) lesions in both ventral and dorsolateral prostate lobes at 6 and 12 months; however, no adenocarcinomas were detected. The effect of combined loss of PTEN was examined by crossing ARR2Pb.Stat3C mice with PTEN+/- null mice. PTEN+/- null mice on an ICR genetic background developed only hyperplasia and PIN at 6 and 12 months, respectively. ARR2Pb.Stat3C x PTEN+/- mice exhibited a more severe prostate phenotype compared with ARR2Pb.Stat3C and PTEN+/- mice. ARR2Pb.Stat3C x PTEN+/- mice developed adenocarcinomas in the ventral prostate as early as 6 months (22% incidence) that reached an incidence of 61% by 12 months. Further evaluations indicated that phospho-Stat3, phospho-Akt, phospho-nuclear factor κB, cyclin D1, and Ki67 were upregulated in adenocarcinomas from ARR2Pb.Stat3C x PTEN+/- mice. In addition, membrane staining for β-catenin and E-cadherin was reduced. The changes in Stat3 and nuclear factor κB phosphorylation correlated most closely with tumor progression. Collectively, these data provide evidence that Stat3 and Akt signaling cooperate in prostate cancer development and progression and that ARR2Pb.Stat3C x PTEN+/- mice represent a novel mouse model of prostate cancer to study these interactions.