Abstract Pseudogenes are a class of non-coding genes that are dysfunctional relatives of known functional genes. Often considered as junk DNA, pseudogenes have recently emerged as functional units in the form of non-coding RNA transcripts and micropeptides with regulatory roles in gene expression. Notably, association of some pseudogenes with oncogenes and tumor suppressor genes have been observed, indicating a possible role in cancer formation. Although many genetic aberrations in prostate cancer (PCa) have been identified, the expression of pseudogenes in PCa has not been well explored. We surveyed the transcriptional landscape of pseudogenes using next generation paired-end sequencing data and observed the formation of a recurrent gene fusion by trans-splicing event between a protein coding gene KLK4 and a noncoding pseudogene KLKP1 and its cognate fusion protein. RNA in situ analysis of 649 cases using tissue microarray identified high Gleason grade specific expression (>6) in 24% of cases compared to benign, high grade prostate intraepithelial neoplasia and atypical lesions, confirming cancer specific expression and with significantly high expression in Caucasian American compared with African American PCa. Furthermore, KLK4-KLKP1 expression was seen to be associated with ERG+ and ETV1+ cases. However, no association was observed with SPINK1+, ETV4+ and ETV5+ tumors, suggesting mutually exclusive expression with distinct PCa markers. Using expression constructs transfected into RWPE, PrEc and HEK293 cells, we confirmed the expression of a ~15 KD KLK4-KLKP1 fusion protein. RT-PCR analysis of 33 PCa derived xenografts identified 15 with endogenous expression of KLK4-KLKP1 fusion transcript. We generated a polyclonal antibody using antigenic peptide from the pseudogene part of the fusion protein and confirmed its specificity by western blot analysis using cell lysates from RWPE, PrEc, HEK293 and PDX models with and without the fusion gene. Immunohistochemistry analysis also confirmed the specificity of the antibody to the fusion protein. To explore the oncogenic properties of KLK4-KLKP1, we analyzed the effects on cell proliferation and invasion using RWPE cells transfected with KLK4-KLKP1. Increased cell proliferation and invasion was observed and Chicken chorioallantoic membrane (CAM) assay also revealed increased cell migration to lower CAM suggesting a role for KLK4-KLKP1 in cancer development. Notably, KLK4-KLKP1 transcripts could be detected in urine samples obtained from PCa patients, indicating the potential for noninvasive detection for early diagnosis. Taken together, we showed the oncogenic role of a new recurrent gene fusion in prostate cancer. In conclusion, our study highlights the underexplored functional roles of pseudogenes and establishes KLK4-KLKP1 as a novel player in PCa development with potential uses as a biomarker and a therapeutic target. Citation Format: Balabhadrapatruni V. S. K. Chakravarthi, Shanker Kalyana-Sundaram, Pavithra D. Arachchige, Shannon Carskadon, Satya S. Pathi, Mireya Diaz-Insua, Craig Rogers, James Peabody, Clara Hwang, Mani Menon, Sean Williamson, Gupta Nilesh, Sooryanarayana Varambally, Nallasivam Palanisamy. Pseudogene-associated recurrent gene fusion in prostate cancer [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2019; 2019 Mar 29-Apr 3; Atlanta, GA. Philadelphia (PA): AACR; Cancer Res 2019;79(13 Suppl):Abstract nr 915.