Despite intense research in the context of neurodegenerative diseases associated with its misfolding, the endogenous human prion protein PrP(C) (or PRNP) has poorly understood physiological functions. Whereas most PrP(C) is exposed to the extracellular environment, conserved domains result in transmembrane forms of PrP(C) that traffic in the endolysosomal system and are linked to inherited and infectious neuropathologies. One transmembrane PrP(C) variant orients the N-terminal 'octarepeat' domain into the cytoplasm. Here we demonstrate that the octarepeat domain of human PrP(C) contains GW/WG motifs that bind Argonaute (AGO) proteins, the essential components of microRNA (miRNA)-induced silencing complexes (miRISCs). Transmembrane PrP(C) preferentially binds AGO, and PrP(C) promotes formation or stability of miRISC effector complexes containing the trinucleotide repeat-containing gene 6 proteins (TNRC6) and miRNA-repressed mRNA. Accordingly, effective repression of several miRNA targets requires PrP(C). We propose that dynamic interactions between PrP(C)-enriched endosomes and subcellular foci of AGO underpin these effects.