Since prostate growth is governed by the androgen signaling pathway, blockade of the pathway is regarded as an appropriate strategy for the treatment of benign prostatic hyperplasia (BPH). Panax ginseng is known to have various pharmacological activities. Of several products of its root, red ginseng, having many bioactive ginsenosides, is most popularly used in Korea, and recently has been reported to control the proliferation of cancer cells. We here tested the effect of a water extract of Korean red ginseng (WKRG) on testosterone-induced prostate hyperplasia. WKRG (daily intraperitoneal injection) prevented prostate overgrowth and epithelial thickening induced by testosterone in rats, and suppressed a rat prostate kallikrein-S3. In human prostate cells, WKRG inhibited testosterone-induced cell proliferation, arrested cell cycle by inducing p21 and p27, and induced apoptosis. Testosterone-induced expression of human kallikrein-3 mRNA and activation of androgen receptor (AR) were effectively inhibited by WKRG. Of the major ginsenosides included in WKRG, 20(S)-Rg3 was identified to repress AR activity and to attenuate prostate cell growth during testosterone stimulation. Moreover, 20(S)-Rg3 downregulated AR by facilitating the degradation of AR protein. WKRG and 20(S)-Rg3 were found to have new pharmacological activities against testosterone-induced prostate overgrowth. Given that red ginseng has been used safely in Asia for 1000 years, red ginseng and 20(S)-Rg3 could be potential therapeutic regimens for treating BPH.