RNA polymerase (pol) III occurs in two forms, containing either the POLR3G subunit or the related paralogue POLR3GL. Whereas POLR3GL is ubiquitous, POLR3G is enriched in undifferentiated cells. Depletion of POLR3G selectively triggers proliferative arrest and differentiation of prostate cancer cells, responses not elicited when POLR3GL is depleted. A small molecule pol III inhibitor can cause POLR3G depletion, induce similar differentiation and suppress proliferation and viability of cancer cells. This response involves control of the fate-determining factor NANOG by small RNAs derived from Alu short interspersed nuclear elements. Tumour initiating activity in vivo can be reduced by transient exposure to the pol III inhibitor. Untransformed prostate cells appear less sensitive than cancer cells to pol III depletion or inhibition, raising the possibility of a therapeutic window.