Approximately 90 % of patients who die of prostate cancer (PCa) have bone metastases, often promoting osteoblastic lesions. We observed that 88 % of castration-resistant PCa (CRPC) bone metastases express prostatic acid phosphatase (PAP), a soluble secreted protein expressed by prostate epithelial cells in predominately osteoblastic (n = 18) or osteolytic (n = 15) lesions. Additionally, conditioned media (CM) of an osteoblastic PCa xenograft LuCaP 23.1 contained significant levels of PAP and promoted mineralization in mouse and human calvaria-derived cells (MC3T3-E1 and HCO). To demonstrate that PAP promotes mineralization, we stimulated MC3T3-E1 cells with PAP and observed increased mineralization, which could be blocked with the specific PAP inhibitor, phosphonic acid. Furthermore, the mineralization promoted by LuCaP 23.1 CM was also blocked by phosphonic acid, suggesting PAP is responsible for the mineralization promoting activity of LuCaP 23.1. In addition, gene expression arrays comparing osteoblastic to osteolytic CRPC (n = 14) identified betacellulin (BTC) as a gene upregulated during the osteoblastic response in osteoblasts during new bone formation. Moreover, BTC levels were increased in bone marrow stromal cells in response to LuCaP 23.1 CM in vitro. Because new bone formation does occur in osteoblastic and can occur in osteolytic CRPC bone metastases, we confirmed by immunohistochemistry (n = 36) that BTC was highly expressed in osteoblasts involved in new bone formation occurring in both osteoblastic and osteolytic sites. These studies suggest a role for PAP in promoting the osteoblastic reaction in CRPC bone metastases and identify BTC as a novel downstream protein expressed in osteoblasts during new bone formation.