Lipids play a complex role in prostate cancer (PCa). Increased de novo synthesis of fatty acids and/or cholesterol is associated with the development of prostate tumors. Liver X Receptors (LXRs) are members of the nuclear receptor family that regulates intracellular lipid homeostasis. Targeting the transcriptional activity of LXRs has, therefore, been proposed as a mechanism for attenuating the progression of PCa. Histone Deacetylases (HDACs), however, have a negative effect on LXR activity. Therefore, HDAC inhibition reduces intracellular cholesterol levels and thereby decreases tumor cell proliferation. LXRs and HDAC inhibitors can, therefore, inhibit tumor proliferation. This review discusses the interacting roles of lipids, LXRs and HDACs in the development of PCa, where increased lipid levels enhance HDAC activity thereby altering LXR-dependent regulation of cellular lipid homeostasis. It provides a new paradigm for the treatment of prostate cancer, where LXRs are activated and HDACs repressed.