The physiological function of the prion protein (PrP) remains enigmatic despite its established involvement in the pathogenesis of spongiform encephalopathies. PrP is a glycolipid-anchored membrane protein, which constitutively recycles between the cell surface and an endosomal compartment. The N-terminal region of PrP contains a four tandem repeat (OP4) of the octapeptide PHGGGWGQ (OP) that binds and reduces Cu(II) ions. We have examined the kinetic properties of the OP4-mediated Cu(II) reduction and found that OP4 exhibits the highest reduction activity around pH 6.5, close to the pH in early endosomes. All four OP units and at least one tryptophan side chain are essential for Cu(II) reduction. The reaction is described by an uncompetitive substrate inhibition mechanism involving a 1:1 Cu(II)-OP4 active intermediate. Structural analysis by Raman spectroscopy has revealed that the Cu(II) ion is coordinated by four histidine Ntau atoms in the active intermediate and the feasibility of formation of this intermediate correlates with the Cu(II) reduction over a pH range from 5.0 to 8.2. Molecular mechanics calculations suggest that two tryptophan residues of OP4 are located near the Cu(II) site, being consistent with the importance of redox-active tryptophan in the Cu(II) reduction. PrP has been proposed to capture Cu(II) ions in the extracellular space and release them in the endosome. The results of this study strongly suggest that PrP also plays a role in the reduction of captured Cu(II) ions prior to their transfer to Cu(I)-specific intracellular copper trafficking proteins.