Prostate cancer is the most commonly diagnosed and the second leading cause of cancer death in men. The androgens-androgen receptor (AR) signaling plays an important role in normal prostate development as well as in prostatic diseases, such as benign hyperplasia and prostate cancer. Accordingly, androgen ablation has been the most effective endocrine therapy for hormone-dependent prostate cancer. Here we report a novel nuclear receptor-mediated mechanism of androgen deprivation. Genetic or pharmacological activation of the liver X receptor (LXR) in vivo lowered androgenic activity by inducing the hydroxysteroid sulfotransferase 2A1 (SULT2A1), an enzyme essential for the metabolic deactivation of androgens. Activation of LXR also inhibited the expression of steroid sulfatase (STS) in the prostate, which may have helped to prevent the local conversion of sulfonated androgens back to active metabolites. Interestingly, LXR also induced the expression of selected testicular androgen synthesizing enzymes. At the physiological level, activation of LXR in mice inhibited androgen-dependent prostate regeneration in castrated mice. Treatment with LXR agonists inhibited androgen-dependent proliferation of prostate cancer cells in LXR- and SULT2A1-dependent manner. In summary, we have revealed a novel function of LXR in androgen homeostasis, an endocrine role distinct to the previously known sterol sensor function of this receptor. LXR may represent a novel therapeutic target for androgen deprivation and may aid in the treatment and prevention of hormone-dependent prostate cancer.