A numerical simulation is performed to investigate the prominence formation in a magnetic arcade by photospheric shearing motions. A two-and-a-half-dimensional magnetohydrodynamic (MHD) code is used, in which the gravitational force, radiative cooling, thermal conduction and a simplified form of coronal heating are included. It is found that a footpoint shear induces an expansion of the magnetic arcade and cooling of the plasma in it. Simultaneously the denser material from the lower part of the arcade is pulled up by the expanding field lines. A local enhancement of radiative cooling is thus effected, which leads to the onset of thermal instability and the condensation of coronal plasma. The condensed material grows vertically to form a sheet-like structure making dips on field lines, leading to the formation of the Kippenhahn- Schluter type prominence. The mass of the prominence is found to be supplied not only by the condensation of the material in the vicinity but also by the siphon-type upflows. The upward growth of the vertical sheet-structure of the prominence is saturated at a certain stage and the newly condensed material is found to slide down from above the prominence along magnetic field lines. This drainage of material leads to the formation of an arc-shaped cavity of low density and low pressure around the prominence. The problem of force and heat balance is addressed and the prominence is found to be not in a static equilibrium but in a dynamic interaction with its environment.