Prostate cancer is the third most common cause of male cancer death in developed countries, and one of the most comprehensively characterized human cancers. Roughly 60% of prostate cancers harbor gene fusions that juxtapose ETS-family transcription factors with androgen regulated promoters. A second subtype, characterized by SPINK1 overexpression, accounts for 15% of prostate cancers. Here we report the discovery of a new prostate cancer subtype characterized by rearrangements juxtaposing the SMAD inhibitor SKIL with androgen regulated promoters, leading to increased SKIL expression. SKIL fusions were found in 6 of 540 (1.1%) prostate cancers and 1 of 27 (3.7%) cell lines and xenografts. 6 of 7 SKIL-positive cancers were negative for ETS overexpression, suggesting mutual exclusivity with ETS fusions. SKIL knockdown led to growth arrest in PC-3 and LNCaP cell line models of prostate cancer, and its overexpression led to increased invasiveness in RWPE-1 cells. The role of SKIL as a prostate cancer oncogene lends support to recent studies on the role of TGF-β signaling as a rate-limiting step in prostate cancer progression. Our findings highlight SKIL as an oncogene and potential therapeutic target in 1-2% of prostate cancers, amounting to an estimated 10,000 cancer diagnoses per year worldwide.