Increasing evidence suggests that aberrant activation of the androgen receptor (AR) plays a pivotal role in the development and progression of androgen depletion-independent prostate cancer (PCa) after androgen deprivation therapy. Here, we show that loss of the PTEN tumor suppressor gene is associated with hyperactivation of the AR in human PCa cell lines. This effect is mediated primarily by its downstream effector FOXO1. In addition to the inhibition of androgenic activation of the AR, forced expression of FOXO1 in PTEN-negative PCa cells also inhibits androgen-independent activation of the AR in a manner independent of FOXO1 transcriptional function. In contrast, silencing of FOXO1 in PTEN-positive cells not only increases the basal activity of the AR in the absence of androgens, it also markedly sensitizes the AR activation by low levels of androgens or nonandrogenic factors such as interleukin-6. FOXO1-mediated inhibition of the AR is partially attenuated by the histone deacetylase (HDAC) inhibitor trichostatin A. Accordingly, FOXO1 interacts with HDAC3 as shown by coimmunoprecipitation assays, and cotransfection of cells with FOXO1 and HDAC3, but not HDAC1 and HDAC2, results in a greater inhibition of AR activity than in cells transfected with FOXO1 or HDAC3 individually. Together, our findings define a novel corepressor function of FOXO1 in inhibition of androgen-independent activation of the AR.