The DKK3 gene encodes a secreted protein, Dkk-3, that inhibits prostate tumor growth and metastasis. DKK3 is downregulated by promoter methylation in many types of cancer, including prostate cancer. Gene silencing studies have shown that Dkk-3 maintains normal prostate epithelial cell homeostasis by limiting TGF-β/Smad signaling. While ectopic expression of Dkk-3 leads to prostate cancer cell apoptosis, it is unclear if Dkk-3 has a physiological role in cancer cells. Here, we show that treatment of PC3 prostate cancer cells with the DNA methyltransferase (DNMT) inhibitor decitabine demethylates the DKK3 promoter, induces DKK3 expression, and inhibits TGF-β/Smad-dependent transcriptional activity. Direct induction of DKK3 expression using CRISPR-dCas9-VPR also inhibited TGF-β/Smad-dependent transcription and attenuated PC3 cell migration and proliferation. These effects were not observed in C4-2B cells, which do not respond to TGF-β. TGF-β signals can regulate gene expression directly via SMAD proteins and indirectly by increasing DNMT expression, leading to promoter methylation. Analysis of genes downregulated by promoter methylation and predicted to be regulated by TGF-β found that DKK3 induction increased expression of PTGS2, which encodes cyclooxygenase-2. Together, these observations provide support for using CRISPR-mediated induction of DKK3 as a potential therapeutic approach for prostate cancer and highlight complexities in Dkk-3 regulation of TGF-β signaling.