AR signaling is essential for the growth and survival of prostate cancer (PCa), including most of the lethal castration-resistant PCa (CRPC). We previously reported that TGF-β signaling in prostate stroma promotes prostate tumor angiogenesis and growth. By using a PCa/stroma co-culture model, here we show that stromal TGF-β signaling induces comprehensive morphology changes of PCa LNCaP cells. Furthermore, it induces AR activation in LNCaP cells in the absence of significant levels of androgen, as evidenced by induction of several AR target genes including PSA, TMPRSS2, and KLK4. SD-208, a TGF-β receptor 1 specific inhibitor, blocks this TGF-β induced biology. Importantly, stromal TGF-β signaling together with DHT induce robust activation of AR. MDV3100 effectively blocks DHT-induced, but not stromal TGF-β signaling induced AR activation in LNCaP cells, indicating that stromal TGF-β signaling induces both ligand-dependent and ligand-independent AR activation in PCa. TGF-β induces the expression of several growth factors and cytokines in prostate stromal cells, including IL-6, and BMP-6. Interestingly, BMP-6 and IL-6 together induces robust AR activation in these co-cultures, and neutralizing antibodies against BMP-6 and IL-6 attenuate this action. Altogether, our study strongly suggests tumor stromal microenvironment induced AR activation as a direct mechanism of CRPC.