Androgen independency is associated with poor prostate cancer (PCa) survival. Here we report that silencing of transglutaminase-2 (TG2) expression by CRISPR-Cas9 is associated with upregulation of androgen receptor (AR) transcription in PCa cell lines. Knockout of TG2 reversed the migratory potential and anchorage independency of PC3 and DU145 cells and revealed a reduced level of mucin-1 (MUC1) RNA transcript through unbiased multi-omics profiling, which was restored by selective add-back of the truncated TG2 isoform (TGM2_v2). Silencing of AR resulted into increased MUC1 in TG2KO PC3 cells showing that TG2 affects transcriptional regulation of MUC1 via repressing AR expression. Treatment of PC3 WT cell line with TG2 inhibitor ZDON led to a significant increase in AR expression and decrease in MUC1. ZDON also blocked the formation of MUC1-multimers labelled with TG amine-donor substrates in reducing conditions, revealing for the first time a role for TG2, which we show to be externalised via extracellular vesicles, in MUC1 stabilisation via calcium-dependent transamidation. A specific antibody towards TGM2_v2 revealed its restricted nuclear location compared to the canonical long form of TG2 (TGM2_v1), which is predominantly cytosolic, suggesting that this form contributes to the previously suggested TG2-mediated NF-κB activation and AR transcriptional repression. As TGM2_v2 transcription was increased in biopsies of early-stage prostate adenocarcinoma (PRAD) patients compared to subjects presenting inflammatory prostatitis, and total TG2 protein expression significantly increased in PRAD versus normal tissue, the role of TG2 and its truncated form as a prostate malignancy marker is suggested. In conclusion, this investigation has provided the first unbiased discovery of a novel pathway mediated by TG2 via MUC1, which is shown to contribute to androgen insensitivity and malignancy of PCa cells and be upregulated in PCa biopsies, with potential relevance to cancer immune evasion.