We studied the biologic properties of hamster-adapted scrapie (strain 263K) and its relationship to the precursor protein of scrapie (PrP33-35Sc). The highest titer of infectious material and the greatest concentration of PrP33-35Sc were in the fractions containing microsomal and synaptosomal membranes. We found traces of infectivity in the absence of PrP33-35Sc associated with matrix protein. Partitioning of membranes with neutral chloroform-methanol resulted in concentration of PrP33-35Sc and infectivity within the interphase layer. Recombination of membrane glycoproteins (interphase) with lipids extracted from homologous brains decreased infectivity greater than or equal to 4 logs. Temperature-dependent phase separation of infected synaptosomal and microsomal membranes with Triton X-114 yielded a phospholipid-rich phase containing a high concentration of PrP33-35Sc and greatest infectivity titers. This material spontaneously formed liposomes, indicating that PrP33-35Sc and PrP33-35C precursor proteins are highly hydrophobic intrinsic membrane components integrated with phospholipids. Homologous membrane phospholipids appear to prevent aggregation of the scrapie isoform of PrP and maintain high levels of infectivity.