TMPRSS2/ERG gene fusions are found in the majority of prostate cancers; however, there is significant heterogeneity in the 5' region of the alternatively spliced fusion gene transcripts. We have found that there is also significant heterogeneity within the coding exons as well. There is variable inclusion of a 72-bp exon and other novel alternatively spliced isoforms. To assess the biological significance of these alternatively spliced transcripts, we expressed various transcripts in primary prostatic epithelial cells (PrEC) and in an immortalized PrEC line, PNT1a. The fusion gene transcripts promoted proliferation, invasion, and motility with variable activities that depended on the structure of the 5' region encoding the TMPRSS2/ERG fusion and the presence of the 72-bp exon. Cotransfection of different isoforms further enhanced biological activity, mimicking the situation in vivo, in which multiple isoforms are expressed. Finally, knockdown of the fusion gene in VCaP cells resulted in inhibition of proliferation in vitro and tumor progression in an in vivo orthotopic mice model. Our results indicate that TMPRSS2/ERG fusion isoforms have variable biological activities promoting tumor initiation and progression and are consistent with our previous clinical observations indicating that certain TMPRSS2/ERG fusion isoforms are significantly correlated with more aggressive disease.