Nearly half of the prostate cancer (PCa) cases show elevated levels of ERG oncoprotein due to TMPRSS2-ERG gene fusion. Here, we demonstrate ERG mediated upregulation of Distal-less homeobox-1 (DLX1), an established PCa biomarker. Using series of functional assays, we show DLX1 elicits oncogenic properties in prostate epithelial cells, and abrogating its function leads to reduced tumor burden in mouse xenografts. Clinically, ~60% of the PCa patients exhibit high DLX1 levels, while ~50% of these cases also harbor elevated ERG associated with aggressive disease and poor survival probability. Mechanistically, we show that ERG gets recruited onto DLX1 promoter and interacts with its enhancer-bound androgen receptor (AR) and FOXA1 to regulate DLX1 expression in TMPRSS2-ERG positive cases. Alternatively, in ERG-negative cases, DLX1 is regulated by AR/AR-V7 and FOXA1. Importantly, BET bromodomain inhibitors disrupt the transcriptional regulators of DLX1 and its associated oncogenic properties, signifying their efficacy in treatment of DLX1-positive PCa patients.