A synthetic peptide homologous to region 106-126 of the prion protein (PrP) is toxic to cells expressing PrP, but not to PrP knockout neurons, arguing for a specific role of PrP in mediating the peptide's activity. Whether this is related to a gain of toxicity or a loss of function of PrP is not clear. We explored the possibility that PrP106-126 triggered formation of PrP(Sc) or other neurotoxic PrP species. We found that PrP106-126 did not induce detergent-insoluble and protease-resistant PrP, nor did it alter its membrane topology or cellular distribution. We also found that neurons expressing endogenous or higher level of either wild-type PrP or a nine-octapeptide insertional mutant were equally susceptible to PrP106-126, and that sub-physiological PrP expression was sufficient to restore vulnerability to the peptide. These results indicate that PrP106-126 interferes with a PrP function that requires only low protein levels, and is not impaired by a pathogenic insertion in the octapeptide region.