Overexpression of ERG in the prostate epithelium, due to chromosomal translocations, contributes to prostate tumorigenesis. Here, genomic analysis of ERG siRNA-treated prostate cells harboring the endogenous TMPRSS2-ERG fusion revealed an inverse relationship between ERG and AnnexinA2 (ANXA2) expression at both the RNA and protein level. ANXA2, a Ca2+-dependent and phospholipid-binding protein, is involved in various cellular functions, including maintenance of epithelial cell polarity. Mechanistic studies defined the prostate-specific transcription start site of ANXA2 and showed that the recruitment of ERG to the ANXA2 promoter is required for transcriptional repression by ERG. Knockdown of ERG enhanced the apical localization of ANXA2, the bundling of actin filaments at cell-cell junctions and formation of a polarized epithelial phenotype. ERG overexpression disrupted ANXA2-mediated cell polarity and promoted epithelial-mesenchymal transition (EMT) by inhibiting CDC42 and RHOA, and by activating cofilin. Immunohistochemistry demonstrated a reciprocal relationship ofANXA2 and ERGexpression in a large fraction of primary prostate cancer clinical specimens. ANXA2 was absent or markedly reduced in ERG(+) tumors, which were mostly well differentiated. ERG(-) tumors,meanwhile, expressedmoderate to high levels of ANXA2, and were either poorly differentiated or displayed subsets of poorly differentiated cells. Taken together, the transcriptional repression of ANXA2 by ERG in prostate epithelial cells plays a critical role in abrogating differentiation, promoting EMT, and in the reciprocal correlation of ERG and ANXA2 expression observed in human prostate cancer. Implications: ANXA2 is a new component of the ERG network with potential to enhance biologic stratification and therapeutic targeting of ERG-stratified prostate cancers.