Hormonal therapy of prostate cancer, by inhibiting androgen production and/or androgen function, is the treatment of choice for advanced prostate cancer. Although most patients respond initially, the effect is only temporary, and the tumor cells will resume proliferation in an androgen-deprived environment. The mechanism for androgen-independent proliferation of cancer cells is unclear. Hormonal therapy induces neuroendocrine differentiation of prostate cancer cells, which is hypothesized to contribute to tumor recurrence by a paracrine mechanism. We studied signal transduction pathways of neuroendocrine differentiation in LNCaP cells after androgen withdrawal, and we showed that both the phosphatidylinositol 3-kinase-AKT-mammalian target of rapamycin pathway and ERK are activated, but only the former is required for neuroendocrine differentiation. A constitutively active AKT promotes neuroendocrine differentiation and a dominant negative AKT inhibits it. Activation of AKT by IGF-1 leads to neuroendocrine differentiation, and neuroendocrine differentiation induced by epinephrine requires AKT activation. We also show that the AKT pathway is likely responsible for neuroendocrine differentiation in DU145, an androgen-independent prostate cancer cell line. Therefore, our study demonstrated a novel function of the AKT pathway in prostate cancer progression and identified potential targets that may be explored for the treatment of androgen-independent cancer.