The thermal unfolding of full-length human recombinant alpha-helical prion protein (alpha-PrP) in neutral pH is reversible, whereas, in the presence of the osmolyte N-trimethylamine oxide (TMAO), the protein acquires a beta-sheet structure at higher temperatures and the thermal unfolding of the protein is irreversible. Lysozyme, an amyloidogenic protein similar to prion protein, regains alpha-helical structure on cooling from its thermally unfolded form in buffer and in TMAO solutions. The thermal stability of alpha-PrP decreases, whereas that of lysozyme increases in TMAO solution. Light-scattering and turbidity values indicate that beta-sheet prion protein exists as soluble oligomers that increase thioflavin T fluorescence and bind to 1-anilino 8-naphthalene sulfonic acid (ANS). The oligomers are resistant to proteinase K digestion and during incubation for long periods they form linear amyloids>5 microm long. The comparable fluorescence polarization of the tryptophan groups and their accessibility to acrylamide in alpha-PrP and oligomers indicate that the unstructured N-terminal segments of the protein, which contain the tryptophan groups, do not associate among themselves during oligomerization. Partial unfolding of alpha-helical prion protein in TMAO solution leads to its structural conversion to misfolded beta-sheet form. The formation of the misfolded prion protein oligomers and their polymerization to amyloids in TMAO are unusual, since the osmolyte generally induces denatured protein to fold to a native-like state and protects proteins from thermal denaturation and aggregation.