Background: There is no consistent evidence with respect to the role of hospital efficiency in improving quality of prostate cancer care. Study objective was to examine the association between hospital efficiency and quality of care in African American, Hispanic, and white Medicare beneficiaries with prostate cancer. Methods: Population-based cohort study using Surveillance, Epidemiological, and End Results-Medicare (SEER-Medicare) data from 2000–2016 for prostate cancer patients aged 66 or older. SEER-Medicare data was linked to American Hospital Association data. We computed hospital technical efficiency using data envelopment analysis. Outcomes were emergency room visits, complications, hospitalizations, cost, treatment and mortality (all-cause and prostate cancer-specific). We used competing risk analysis for survival, log-link GLM models for cost, and Poisson (zero inflated) models for count data. Propensity score and instrumental variable approaches were used to minimize potential biases. Results: We identified 87,117 eligible prostate cancer patients. Of these, 86% were white, 11% were African American, and 3% were Hispanic. Table shows the association between four quartiles of efficiency and outcomes. Higher hospital efficiency was consistently associated with decreased all-cause mortality, prostate cancer-specific mortality and emergency room visits. Association between hospital efficiency and mortality varied between racial and ethnic groups. Conclusions: Increasing hospital efficiency may reduce some of the disparity in prostate cancer outcomes. Our findings indicate important racial and ethnic differences that should be considered while planning hospital efficiency models to improve quality of prostate cancer care. Policies to redirect minority patients to hospital with higher efficiency may reduce racial and ethnic disparity in quality of care and outcomes.