Aberrant folding of the mammalian prion protein (PrP) is linked to prion diseases in humans and animals. We show that during post-translational targeting of PrP to the endoplasmic reticulum (ER) the putative transmembrane domain induces misfolding of PrP in the cytosol and interferes with its import into the ER. Unglycosylated and misfolded PrP with an uncleaved N-terminal signal sequence associates with ER membranes, and, moreover, decreases cell viability. PrP expressed in the cytosol, lacking the N-terminal ER targeting sequence, also adopts a misfolded conformation; however, this has no adverse effect on cell growth. PrP processing, productive ER import, and cellular viability can be restored either by deleting the putative transmembrane domain or by using a N-terminal signal sequence specific for co-translational ER import. Our study reveals that the putative transmembrane domain features in the formation of misfolded PrP conformers and indicates that post-translational targeting of PrP to the ER can decrease cell viability.