The clinical significance of atypical glands suspicious for malignancy (atypia) on prostate biopsy is unclear. We studied a cohort of 139 patients with atypia who underwent repeat prostate biopsy. We analyzed clinical and pathological variables that may be associated with cancer on repeat biopsy. Cancer was diagnosed in 41 (29%) of patients with atypia: 26 of 41 (66%) were Gleason 6, 20% were Gleason 7 and 7% were Gleason 8 (Gleason < 6 not reported). There were no significant associations of age, race, family history, PSA, PSA density (PSAd), number of previous biopsies or time to repeat biopsy with cancer diagnosis. In multivariate regression, histological inflammation was associated with an 85% decreased probability of cancer on repeat biopsy (odds ratio; OR 0.15; 95% confidence interval; CI 0.04-0.57; P=0.04). Radical prostatectomy was performed in 14 of 41 (34%) patients with cancer; 6 (43%) were Gleason sum ≥7, 3 (21%) were pT3a and 1 (7%) had lymph node metastases. In conclusion, inflammation was independently associated with a significantly decreased risk of cancer on repeat biopsy. However, some patients with initial atypia have higher-risk prostate cancer. Additional studies are needed to elucidate these associations.