The cellular mechanisms by which prions cause neurological dysfunction are poorly understood. To address this issue, we have been using cultured cells to analyze the localization, biosynthesis, and metabolism of PrP molecules carrying mutations associated with familial prion diseases. We report here that mutant PrP molecules are delayed in their maturation to an endoglycosidase H-resistant form after biosynthetic labeling, suggesting that they are impaired in their exit from the endoplasmic reticulum (ER). However, we find that proteasome inhibitors have no effect on the maturation or turnover of either mutant or wild-type PrP molecules. Thus, in contrast to recent studies from other laboratories, our work indicates that PrP is not subject to retrotranslocation from the ER into the cytoplasm prior to degradation by the proteasome. We find that in transfected cells, but not in cultured neurons, proteasome inhibitors cause accumulation of an unglycosylated, signal peptide-bearing form of PrP on the cytoplasmic face of the ER membrane. Thus, under conditions of elevated expression, a small fraction of PrP chains is not translocated into the ER lumen during synthesis, and is rapidly degraded in the cytoplasm by the proteasome. Finally, we report a previously unappreciated artifact caused by treatment of cells with proteasome inhibitors: an increase in PrP mRNA level and synthetic rate when the protein is expressed from a vector containing a viral promoter. We suggest that this phenomenon may explain some of the dramatic effects of proteasome inhibitors observed in other studies. Our results clarify the role of the proteasome in the cell biology of PrP, and suggest reasonable hypotheses for the molecular pathology of inherited prion diseases.