Despite the activity of cellular quality-control mechanisms, subsets of mature and newly synthesized polypeptides fail to fold properly and form insoluble aggregates. In some cases, protein aggregation leads to the development of human neurodegenerative maladies, including Alzheimer's and prion diseases. Aggregates of misfolded prion protein (PrP), which appear in cells after exposure to the drug cyclosporin A (CsA), and disease-linked PrP mutants have been found to accumulate in juxtanuclear deposition sites termed 'aggresomes'. Recently, it was shown that cells can contain at least two types of deposition sites for misfolded proteins: a dynamic quality-control compartment, which was termed 'JUNQ', and a site for terminally aggregated proteins called 'IPOD'. Here, we show that CsA-induced PrP aggresomes are dynamic structures that form despite intact proteasome activity, recruit chaperones and dynamically exchange PrP molecules with the cytosol. These findings define the CsA-PrP aggresome as a JUNQ-like dynamic quality-control compartment that mediates the refolding or degradation of misfolded proteins. Together, our data suggest that the formation of PrP aggresomes protects cells from proteotoxic stress.