Background: There is a critical need to reduce initial prostate biopsies (PB) in the PSA ‘gray zone’ of 2-10 ng/mL. Non-invasive screening tools that add predictive value for identifying high-grade, Gleason score (GS) ≥7 should impact on the current diagnostic paradigm. We have developed standardized processes to isolate exosomal-RNA from first-catch urine specimens and sought to identify a gene signature that reliably differentiates GS7+ from GS6 and benign disease. Methods: First-catch non-DRE urine specimens were collected at six sites in standard collection vessels without preservative, stored at 2-8C (up to two weeks) and shipped on ice to a central laboratory (Exosome Diagnostics, St. Paul, MN). Upon receipt, samples were filtered (0.8um), and exosome isolation and RNA extraction performed. RT-qPCR RNA copy numbers of ERG and PCA3, normalized to SPDEF, were measured to generate a three-gene signature, defined to yield a score S between 0 and 30, where S>10 predicts GS7+ vs. GS6 and benign lesions with optimal NPV, Sensitivity and Specificity. Results: Urine samples from 170 men (PSA 2-10 ng/mL, first biopsy,40 mL; median age 62 years, median PSA 5.1 ng/mL, 70% negative DRE, 77%, no family history, 82% Caucasian) of 453 total, with comparable demographics, were evaluated. With 46% and 21% prevalence of positive biopsy for any cancer or GS7+ disease, respectively, a dichotomous gene signature demonstrated good clinical performance in predicting biopsy result. For GS7+, the NPV and PPV were 98.6% and 34.7%, respectively. A continuous score alone had an AUC of 0.76 for discriminating GS7+ from GS6 and benign disease and the results were significantly better than the prostate cancer prevention trial risk calculator (PCPTRC), AUC 0.60. Conclusions: A novel, non-invasive urine exosome gene signature demonstrated independent, negative predictive value for the diagnosis of GS7+ from first biopsy patients with ‘gray zone’ serum PSA. Its use in the biopsy decision process could result in fewer prostate biopsies once validated on an expanded prospective cohort.