In prostate cancer, the mechanism by which the stromal cells surrounding the cancer epithelium become reactive and overproduce growth factors is unclear. Furthermore, the precise process of how these stromal cells stimulate the cancer epithelium is not fully understood. We recently found that protease-activated receptor-1 (PAR-1) in these reactive stromal cells is upregulated. To investigate the role of PAR-1 in the stromal–epithelial interaction, WPMY-1 stromal myofibroblasts were stimulated with PAR-1 agonists including thrombin and PAR-1 activating peptide. We show that WPMY-1 cells have functional PAR-1 by signaling through ERK1/2. Conditioned media (CM) from PAR-1 agonists-treated WPMY-1 cells stimulate the epithelial LNCaP cells leading to ERK1/2 activation and cell proliferation. Cytokine array analysis of the CM demonstrates that PAR-1 induces stromal cells to release numerous cytokines, of which interleukin 6 (IL-6) is the major factor responsible for mitogenic signaling in LNCaP cells. CM further induces expression of prostate-specific kallikrein-related peptidase-3 (KLK3/PSA) and KLK4 in LNCaP cells via the IL-6 pathway. Moreover, KLK4 functions as a potent agonist of PAR-1 by cleaving the receptor at the proper site on cell surface. KLK4 triggers transmembrane signaling and upregulates IL-6 in WPMY-1 cells through PAR-1. Immunohistochemical analysis indicates that PAR-1 is predominantly expressed in peritumoral stroma while KLK4 is produced exclusively by the epithelial cancer cells. These data provide evidence for a novel double-paracrine mechanism whereby cancer epithelium produces KLK4 to activate PAR-1 in the surrounding stroma, which in-turn releases cytokines (IL-6) that stimulate cancer cells to proliferate and increase production of KLKs.