Although the steady state distribution of the androgen receptor (AR) is predominantly nuclear in androgen-treated cells, androgen-bound AR shuttles between the nucleus and the cytoplasm. In the present study we have addressed how nucleocytoplasmic shuttling contributes to the regulation of AR. Nuclear transport signal fusions were used to force AR localization to the nucleus or cytoplasm of prostate cancer cells, and the effect of localization on shuttling, transcription, androgen binding, and phosphorylation was determined. Fusing the SV40 nuclear localization signal (NLS) or c-Abl nuclear export signal (NES) to AR resulted in androgen-independent localization to the nucleus or cytoplasm, respectively. AR forced to the nucleus was transcriptionally active on PSA and MMTV promoters of reporter genes. AR forced to the cytoplasm was largely inactive on the PSA promoter, but, surprisingly, AR was active on the MMTV promoter and on two endogenous genes examined. Thus, highly transient nuclear localization of AR is sufficient to activate transcription. Androgen dissociation rates and the K_D of AR for androgen were similar whether AR was localized to the cytoplasm or the nucleus suggesting the ligand binding cycle of AR is not strictly linked to its compartmentalization. Using phosphosite antibodies, we found that compartmentalization influences the phosphorylation state of AR. We show there is a bias for androgen-dependent phosphorylation of Ser81, Ser256, and Ser308 in the nucleus and androgen-independent phosphorylation of Ser94 in the cytoplasm. We propose that one function of nucleocytoplasmic shuttling is to integrate the signaling environment in the cytoplasm with AR activity in the nucleus.