Prostate cancer antigen 3 (PCA3) is the most specific prostate cancer biomarker but its function remains unknown. Here we identify PRUNE2, a target protein-coding gene variant, which harbors the PCA3 locus, thereby classifying PCA3 as an antisense intronic long noncoding (lnc)RNA. We show that PCA3 controls PRUNE2 levels via a unique regulatory mechanism involving formation of a PRUNE2/PCA3 double-stranded RNA that undergoes adenosine deaminase acting on RNA (ADAR)-dependent adenosine-to-inosine RNA editing. PRUNE2 expression or silencing in prostate cancer cells decreased and increased cell proliferation, respectively. Moreover, PRUNE2 and PCA3 elicited opposite effects on tumor growth in immunodeficient tumor-bearing mice. Coregulation and RNA editing of PRUNE2 and PCA3 were confirmed in human prostate cancer specimens, supporting the medical relevance of our findings. These results establish PCA3 as a dominant-negative oncogene and PRUNE2 as an unrecognized tumor suppressor gene in human prostate cancer, and their regulatory axis represents a unique molecular target for diagnostic and therapeutic intervention.