A fraction of patients undergoing androgen deprivation therapy (ADT) for advanced prostate cancer (PCa) will develop recurrent castrate-resistant PCa (CRPC) in bone. Strategies to prevent CRPC relapse in bone are lacking. Here we show that the cholesterol-lowering drugs statins decrease castration-induced bone marrow adiposity in the tumor microenvironment and reduce PCa progression in bone. Using primary bone marrow stromal cells (BMSC) and M2-10B4 cells, we showed that ADT increases bone marrow adiposity by enhancing BMSC-to-adipocyte transition in vitro. Knockdown of androgen receptor abrogated BMSC-to-adipocyte transition, suggesting an androgen receptor-dependent event. RNAseq analysis showed that androgens reduce the secretion of adipocyte hormones/cytokines including leptin during BMSC-to-adipocyte transition. Treatment of PCa C4-2b, C4-2B4, and PC3 cells with leptin led to an increase in cell cycle progression and nuclear Stat3. RNAseq analysis also showed that androgens inhibit cholesterol biosynthesis pathway, raising the possibility that inhibiting cholesterol biosynthesis may decrease BMSC-to-adipocyte transition. Indeed, statins decreased BMSC-to-adipocyte transition in vitro and castration-induced bone marrow adiposity in vivo. Statin pre-treatment reduced 22RV1 PCa progression in bone after ADT. Our findings with statin may provide one of the mechanisms to the clinical correlations that statin use in patients undergoing ADT seems to delay progression to "lethal" PCa.