Prion diseases or transmissible spongiform encephalopathies are a rare group of fatal neurodegenerative illnesses in humans and animals caused by misfolding of prion protein (PrP). Prion protein is a cell-surface glycosylphosphatidylinositol (GPI)-anchored glycoprotein expressed mostly in the central and peripheral nervous system, and this membrane-bound protein can be cleaved from the cell membranes by phosphoinositide phospholipase C. Numerous studies have investigated GPI-free recombinant PrP, but the role of GPI on misfolding of PrP is not well known. In this study, we synthesized a GPI analog that was covalently linking to a PrP S230C mutant, resulting in S230C-GPI. The structural changes in S230C-GPI upon binding to lipid vesicles composed of mixtures of the zwitterionic lipid (POPC) and the anionic lipid (POPG) were analyzed by circular dichroism spectroscopy, and the amyloid aggregation of S230C-GPI in the liberation from phospholipid vesicles was monitored by proteinase K-digestion assay. Our results indicate that S230C-GPI in the liberation of lipid vesicles has high tendency to misfold into amyloid fibrils, while the membrane-bound S230C-GPI proteins are highly stable and rarely convert into amyloid forms. In addition, the role of cholesterol in S230C-GPI was studied. The effect of GPI, cholesterol and phospholipid vesicles on misfolding of PrP is further discussed.