Gene fusions, resulting from chromosomal rearrangements, have been attributed to leukaemias and soft tissue sarcomas. The recent discovery of a recurrent gene fusion TMPRSS2-ERG in approximately half of the prostate cancers tested indicates that gene fusions also play a role in the onset of common epithelial cancers. Prostate cancer is the most commonly diagnosed malignancy and the second leading cause of cancer-related deaths in the Western male population. It is a heterogeneous disease, both in terms of pathology and clinical presentation. Since the discovery of the TMPRSS2-ERG fusion, other gene fusions have been reported, most of which result in the androgen-regulated over-expression of the oncogene ERG or other ETS transcription factors. The high prevalence of these gene fusions represents a distinct class of tumours, which may give more insight in the heterogeneity of the disease. These gene fusions are of interest as biomarkers for diagnosis of prostate cancer, and some of them could be useful in predicting the presence of aggressive disease. This review focuses on the biological significance and clinical implementation of gene fusions, and particularly the most commonly reported TMPRSS2-ERG fusion, in prostate cancer.