Current PSA blood tests cannot do this, meaning many men experience unnecessary worry, investigations and treatment.
The prostate urine risk (PUR) test looks for genetic markers to give a more accurate assessment.
Trials in 537 patients suggest it can reliably sort men by risk.
It is one of a number of new tests - including other urine-based ones, as well as blood tests and scans - scientists are pursuing to improve prostate cancer detection.
A combination of checks rather than one single test may ultimately prove to be the best approach, experts say.
Prostate cancer is the most common cancer affecting men in the UK, with 47,000 new cases a year.
A PSA test can give confusing results, which is why routine prostate screening is not yet offered to men.
About 75% or three in every four men who get a positive PSA test result are not found to have cancer when they go for a follow-up biopsy.
And PSA misses the cancer in about 15% of men with prostate cancer.
It also cannot show whether a cancer will probably go on to cause harm.
Prostate cancer often grows slowly to start with and may never cause any problems.
But men with aggressive tumours need treatment to stop it spreading.
Shea Connell, who led the research, at the University of East Anglia and the Norfolk and Norwich University Hospital, said a bigger trial was now planned.
He hopes the urine test could become available for doctors to use within three years - as an add-on to PSA testing.
"Prostate cancer is more commonly a disease men die with rather than from," he said.
"Unfortunately, we currently lack the ability to tell which men diagnosed with prostate cancer will need radical treatment and which men will not.
"A policy of 'active surveillance' has been developed as a way to combat this uncertainty but it requires invasive follow-ups and constant reminders that a patient has a cancer with an uncertain natural history.
"This results in up to 50% of men on active surveillance self-electing for treatment - whether they need it or not.
"It's clear that there is a considerable need for additional, more accurate, tests."
Georgina Hill, from Cancer Research UK, said the findings, published in BJU International, were "promising" but needed confirming in more patients before the test could be offered routinely.
Dr David Montgomery, from Prostate Cancer UK, said: "More research now needs to be done to see how accurate this is compared to the newer, non-invasive methods being offered, such as multi-parametric MRI scans."
