Automatic prostate segmentation in MR images plays an important role in prostate cancer diagnosis. However, there are two main challenges: (1) Large inter-subject prostate shape variations; (2) Inhomogeneous prostate appearance. To address these challenges, we propose a new hierarchical prostate MR segmentation method, with the main contributions lying in the following aspects: First, the most salient features are learnt from atlases based on a subclass discriminant analysis (SDA) method, which aims to find a discriminant feature subspace by simultaneously maximizing the inter-class distance and minimizing the intra-class variations. The projected features, instead of only voxel-wise intensity, will be served as anatomical signature of each voxel. Second, based on the projected features, a new multi-atlases sparse label fusion framework is proposed to estimate the prostate likelihood of each voxel in the target image from the coarse level. Third, a domain-specific semi-supervised manifold regularization method is proposed to incorporate the most reliable patient-specific information identified by the prostate likelihood map to refine the segmentation result from the fine level. Our method is evaluated on a T2 weighted prostate MR image dataset consisting of 66 patients and compared with two state-of-the-art segmentation methods. Experimental results show that our method consistently achieves the highest segmentation accuracies than other methods under comparison.