Prion diseases or transmissible spongiform encephalopathies, are neurodegenerative disorders that are genetic, sporadic, or infectious. The pathogenetic event common to all prion disorders is the conformational transformation of the cellular prion protein (PrP^C) to the scrapie form (PrP^Sc), that deposits in the brain parenchyma and induces neuronal death. Infectious prion disorders are caused by exogenously introduced PrP^Sc that acts as a template in the conversion of endogenous PrP^C to nascent PrP^Sc, and subsequently the process becomes autocatalytic. To understand the process of cellular uptake of PrP^Sc and its mechanism of cellular toxicity, previous studies have used a PrP fragment spanning residues 106-126 (PrP^Tx) that is toxic to primary neurons in culture, and mimics PrP^Sc in its biophysical properties [9,11,14]. Several possible mechanisms of cell death by PrP^Tx have been proposed [2,3,10,11,18], but the existing data are unclear. To identify the biochemical pathways of neurotoxicity by this fragment, we have isolated mutant neuroblastoma and NT-2 cells that are resistant to toxicity by PrP^Tx. We show that these cells bind and internalize PrP^Tx in a temperature dependent fashion, and the peptide accumulates in intracellular compartments, probably lysosomes, where it has an unusually long half-life. The PrP^Tx-resistant phenotype of the cells reported in this study could result from aberrant binding or internalization of the peptide, or due to an abnormality in the downstream pathway(s) of neuronal toxicity. The PrP^Tx-resistant cells are therefore a useful tool for evaluating the cellular and biochemical pathways that lead to cell death by this peptide, and will provide insight into the mechanism(s) of neurotoxicity by PrP^Sc.