Marked reactive stroma formation, designated as grade 3 reactive stroma, is associated with poor outcome in clinically localized prostate cancer. To understand the biological processes and signaling mechanisms underlying the formation of such reactive stroma, we carried out microarray gene expression analysis of laser-captured reactive stroma and matched normal stroma. Seventeen cases of reactive stroma grade 3 cancer were used to laser-capture tumor and normal stroma. Expression analysis was carried out using Agilent 44K arrays. Up-regulation of selected genes was confirmed by quantitative reverse transcription-PCR. Expression data was analyzed to identify significantly up- and down-regulated genes, and gene ontology analysis was used to define pathways altered in reactive stroma. A total of 544 unique genes were significantly higher in the reactive stroma and 606 unique genes were lower. Gene ontology analysis revealed significant alterations in a number of novel processes in prostate cancer reactive stroma, including neurogenesis, axonogenesis, and the DNA damage/repair pathways, as well as evidence of increases in stem cells in prostate cancer reactive stroma. Formation of reactive stroma in prostate cancer is a dynamic process characterized by significant alterations in growth factor and signal transduction pathways and formation of new structures, including nerves and axons.