Mechanisms controlling epithelial proliferation and differentiation in the prostate have been primarily investigated in mouse models. The regulation of proliferation and differentiation is poorly understood in human prostate epithelial cells. In vivo, the glandular prostate epithelium consists of a p63-positive proliferating basal cell layer and a post-mitotic p27-positive secretory cell layer. We have established an organized stratified culture system of human primary prostate epithelial cells to gain insight into mechanisms regulating proliferation and differentiation. In this system, expression of p63 is observed in the bottom layer. In addition, BrdU incorporation persists even though cells are confluent. In contrast, in the upper layer, p63 expression is greatly diminished, p27 is expressed, and the cells are growth arrested. Overexpression of cyclin D1 or knockdown of p27 does not increase proliferation. After inactivation of the nuclear phosphoprotein Rb, the cell layers remain organized and cell proliferation increases only in the bottom layer. Furthermore, the expression of p63 remains confined to the bottom layer after Rb inactivation. Altogether, this in vitro model recapitulates certain aspects of in vivo growth regulation and differentiation and suggests that the loss of Rb family proteins in human cells trigger hyperplasia but is not sufficient for transformation.