The insulin-like growth factor (IGF) axis is a molecular pathway intensively investigated in cancer research. Clinical trials targeting the IGF1 receptor (IGF1R) in different tumors, including prostate cancer, are under way. Although studies on the IGF axis in prostate cancer have already entered into clinical trials, the expression and functional role of the IGF axis in benign prostate and in prostate cancer needs to be better defined. We determined mRNA expression levels of the IGF axis in microdissected tissue specimens of local prostate cancer using quantitative PCR. All members of the IGF axis, including IGF1, IGF2, IGF binding proteins 1 through 6, and insulin receptor, were measured in both the stromal and epithelial compartments of the prostate. IGF1, IGF2, IGF1R, and insulin receptor were down-regulated in local prostate cancer tissue compared with matched benign tissue, suggesting that the IGF axis is not induced during prostate cancer development. Using a new prostate epithelial differentiation model, we demonstrate that the expression of the IGF axis is enhanced during normal prostate epithelial differentiation and regulated by tumor growth factor (TGF)-β. Our data reveal a functional role of the IGF axis in prostate differentiation, underscoring the importance of the IGF axis in normal development and emphasizing the importance of accurate target validation before moving to advanced clinical trials.