Currently used xenograft models for prostate cancer bone metastasis lack the adequate tissue composition necessary to study the interactions between human prostate cancer cells and the human bone microenvironment. We introduce a tissue engineering approach to explore the interactions between human tumor cells and a humanized bone microenvironment. Scaffolds, seeded with human primary osteoblasts in conjunction with BMP7, were implanted into immunodeficient mice to form humanized tissue engineered bone constructs (hTEBCs) which consequently resulted in the generation of highly vascularized and viable humanized bone. At 12 weeks, PC3 and LNCaP cells were injected into the hTEBCs. Seven weeks later the mice were euthanized. Micro-CT, histology, TRAP, PTHrP and osteocalcin staining results reflected the different characteristics of the two cell lines regarding their phenotypic growth pattern within bone. Microvessel density, as assessed by vWF staining, showed that tumor vessel density was significantly higher in LNCaP injected hTEBC implants than in those injected with PC3 cells (p < 0.001). Interestingly, PC3 cells showed morphological features of epithelial and mesenchymal phenotypes suggesting a cellular plasticity within this microenvironment. Taken together, a highly reproducible humanized model was established which is successful in generating LNCaP and PC3 tumors within a complex humanized bone microenvironment. This model simulates the conditions seen clinically more closely than any other model described in the literature to date and hence represents a powerful experimental platform that can be used in future work to investigate specific biological questions relevant to bone metastasis.