Accumulating evidence suggests an enhancing effect of estrogens on prostate cancer (PCa) progression. Matrix metalloproteinase 2 (MMP2), which plays an important role in prostate cancer invasion, is mainly expressed in prostatic stromal cells (PrSC). Here we show that estradiol (E(2)) treatment up-regulates MMP2 production in PrSC, which promotes PCa cell invasion in a paracrine manner. Conditioned medium (CM) was collected from E(2)-treated prostatic stromal cell line WPMY-1 and primary PrSC. The CM of E(2)-treated WPMY-1 and PrSC promoted invasion of PCa cells, as measured by Matrigel transwell assays. Treatment with E(2) and 1,3,5-Tris(4-hydroxyphenyl)-4-propyl-1H-pyrazole, an estrogen receptor-alpha (ERα) specific agonist, significantly up-regulated MMP2 expression in WPMY-1 and PrSC cells at both mRNA and protein levels. The CM treated with an anti-MMP2 antibody lost the stimulatory effect on invasion of PCa cells. The ER inhibitor ICI 182,780, as well as a TGFβ1 neutralizing antibody and ERα-specific small interfering RNA effectively suppressed E(2)-induced MMP2 expression in WPMY-1 cells. Mechanistic studies showed that E(2) up-regulated MMP2 in an indirect manner: E(2) induced TGFβ1 expression via ERα; TGFβ1 stimulated MMP2 expression in PrSC; the invasion of PCa cells were stimulated by elevated MMP2 expression induced by E(2) in a paracrine manner. Our data show that E(2) induces MMP2 expression in WPMY-1 and PrSC cells, which was mediated by TGFβ1. The effect of E(2) on invasion of PCa cells is mediated by up-regulation of MMP2 in a paracrine mechanism.