Amyloid-beta (Aβ) oligomers are thought to trigger Alzheimer's disease pathophysiology. Cellular prion protein (PrP(C)) selectively binds oligomeric Aβ and can mediate Alzheimer's disease-related phenotypes. We examined the specificity, distribution and signaling of Aβ-PrP(C) complexes, seeking to understand how they might alter the function of NMDA receptors (NMDARs) in neurons. PrP(C) is enriched in postsynaptic densities, and Aβ-PrP(C) interaction leads to Fyn kinase activation. Soluble Aβ assemblies derived from the brains of individuals with Alzheimer's disease interacted with PrP(C) to activate Fyn. Aβ engagement of PrP(C)-Fyn signaling yielded phosphorylation of the NR2B subunit of NMDARs, which was coupled to an initial increase and then a loss of surface NMDARs. Aβ-induced dendritic spine loss and lactate dehydrogenase release required both PrP(C) and Fyn, and human familial Alzheimer's disease transgene-induced convulsive seizures did not occur in mice lacking PrP(C). These results delineate an Aβ oligomer signal transduction pathway that requires PrP(C) and Fyn to alter synaptic function, with deleterious consequences in Alzheimer's disease.