Polymorphic basic residues near the C terminus of the prion protein (PrP) in humans and sheep appear to protect against prion disease. In heterozygotes, inhibition of prion formation appears to be dominant negative and has been simulated in cultured cells persistently infected with scrapie prions. The results of nuclear magnetic resonance and mutagenesis studies indicate that specific substitutions at the C-terminal residues 167, 171, 214, and 218 of PrP(C) act as dominant-negative, inhibitors of PrP(Sc) formation (K. Kaneko et al., Proc. Natl. Acad. Sci. USA 94:10069-10074, 1997). Trafficking of substituted PrP(C) to caveaola-like domains or rafts by the glycolipid anchor was required for the dominant-negative phenotype; interestingly, amino acid replacements at multiple sites were less effective than single-residue substitutions. To elucidate which domains of PrP(C) are responsible for dominant-negative inhibition of PrP(Sc) formation, we analyzed whether N-terminally truncated PrP(Q218K) molecules exhibited dominant-negative effects in the conversion of full-length PrP(C) to PrP(Sc). We found that the C-terminal domain of PrP is not sufficient to impede the conversion of the full-length PrP(C) molecule and that N-terminally truncated molecules (with residues 23 to 88 and 23 to 120 deleted) have reduced dominant-negative activity. Whether the N-terminal region of PrP acts by stabilizing the C-terminal domain of the molecule or by modulating the binding of PrP(C) to an auxiliary molecule that participates in PrP(Sc) formation remains to be established.