Tumor recurrence in prostate cancer has been attributed to the presence of CD44-expressing tumor-initiating cells. In this study, we report that miR-708 is a key negative regulator of this CD44+ subpopulation of prostate cancer cells, with important implications for diagnosis and prognosis of this disease. miR-708 was underexpressed in CD44+ cells from prostate cancer xenografts. Reconstitution of miR-708 in prostate cancer cell lines or CD44+ prostate cancer cells led to decreased tumorigenicity in vitro. Intratumoral delivery of synthetic miR-708 oligonucleotides triggered regression of established tumors in a murine xenograft model of human prostate cancer. Conversely, miR-708 silencing in a purified CD44− population of prostate cancer cells promoted tumor growth. Functional studies validated CD44 to be a direct target of miR-708 and also identified the serine/threonine kinase AKT2 as an additional target. Clinically, low miR-708 expression was associated significantly with poor survival outcome, tumor progression, and recurrence in patients with prostate cancer. Together, our findings suggest that reduced miR-708 expression leads to prostate cancer initiation, progression, and development by regulating the expression of CD44 as well as AKT2. miR-708 therefore may represent a novel therapeutic target or diagnostic and prognostic biomarker in prostate cancer.