The prion protein PrPc is a glycoprotein of unknown function normally found in neurons and glia. It is involved in diseases such as bovine spongiform encephalopathy (BSE), scrapie and Creutzfeldt-Jakob disease. PrPSc, an altered isoform of PrPC that is associated with disease, shows greater protease resistance and is part of the infectious agent, the prion. Prion diseases are characterized by neuronal degeneration, gliosis and accumulation of PrPSc. Mice devoid of PrPC are resistant to scrapie. A fragment of human PrP consisting of amino acids 106-126 that forms fibrils in vitro is toxic to cultured neurons. Here we show that this toxic effect requires the presence of microglia which respond to PrP106-126 by increasing their oxygen radical production. The combined direct and microglia-mediated effects of PrP106-126 are toxic to normal neurons but are insufficient to destroy neurons from mice not expressing PrPC.