There is a critical need for more effective therapeutic approaches for prostate cancer. Research in this area, however, has been seriously hampered by a lack of clinically relevant, experimental in vivo models of the disease. This review particularly focuses on the development of prostate cancer xenograft models based on subrenal capsule grafting of patients’ tumor tissue into nonobese diabetic/severe combined immunodeficient (NOD/SCID) mice. This technique allows successful development of transplantable, patient-derived cancer tissue xenograft lines not only from aggressive metastatic, but also from localized prostate cancer tissues. The xenografts have been found to retain key biological properties of the original malignancies, including histopathological and molecular characteristics, tumor heterogeneity, response to androgen ablation and metastatic ability. As such, they are highly clinically relevant and provide valuable tools for studies of prostate cancer progression at cellular and molecular levels, drug screening for personalized cancer therapy and preclinical drug efficacy testing; especially when a panel of models is used to cover a broader spectrum of the disease. These xenograft models could therefore be viewed as next-generation models of prostate cancer.