RATIONALE: Radiation therapy uses high-energy x-rays to damage tumor cells. Giving radiation therapy through seeds implanted into the prostate may kill more tumor cells.

PURPOSE: Phase II trial to study the effectiveness of brachytherapy in treating patients with stage I or stage II prostate cancer.

OBJECTIVES: I. Evaluate the effectiveness of transrectal ultrasound guided permanent radioactive implantation of the prostate in patients with confined adenocarcinoma of the prostate. II. Assess the overall survival, disease specific survival, clinical relapse (local or distant), PSA levels, and genitourinary and gastrointestinal morbidity in these implant patients. III. Assess the quality of life of these patients.

OUTLINE: This is a multicenter study. Patients receive transrectal ultrasound guided radioactive I-125 seeds implanted into the prostate. At least one week prior to implant, patients undergo transurethral ultrasound study to determine the volume of prostate. Following implantation, seeds that have extruded into the bladder or lodged in the urethral wall are retrieved, and extra seeds may be implanted into identified "cold spots" for uniform seed distribution. Prostate rebiopsy is required before starting hormonal therapy for local progression or biochemical failure without clear focus of progression. Quality of life is assessed every 3 months for 1 year, then every 6 months for 1 year, and then annually for 3 years. Patients are followed every 3 months for 1 year, then every 6 months for 2 years, and then annually thereafter.

PROJECTED ACCRUAL: A total of 95 patients will be accrued for this study within 1 year.

DISEASE CHARACTERISTICS: Histologically proven locally confined adenocarcinoma of the prostate Stage I or II (T1b-c or T2a-b, NX, M0) PSA no greater than 10 ng/mL Prostate volume by transurethral ultrasound no greater than 45/mm3 at least 1 week, but no more than 4 weeks, prior to implant Gleason score no greater than 6 American Urological Association voiding symptom score no greater than 12 No evidence of distant metastases No lymph node involvement

PATIENT CHARACTERISTICS: Age: Not specified Performance status: Karnofsky 70-100% Life expectancy: Not specified Hematopoietic: Not specified Hepatic: Not specified Renal: Not specified Other: No prior or concurrent malignancy within 5 years except basal or squamous cell skin cancer No major medical or psychiatric illness

PRIOR CONCURRENT THERAPY: Biologic therapy: Not specified Chemotherapy: No prior chemotherapy Endocrine therapy: No prior hormonal therapy, including finasteride Radiotherapy: No prior pelvic radiotherapy Surgery: No prior radical surgery for prostate cancer (e.g., transurethral prostatectomy) No hip prosthesis