Prion protein is involved in severe neurodegenerative disorders but its physiological role is still in debate due to an absence of major developmental defects in knockout mice. Previous reports in zebrafish indicate that the two prion genes, PrP1 and PrP2, are both involved in several steps of embryonic development thus providing a unique route to discover prion protein function. Here we investigate the role of PrP2 during development of a mechano-sensory system, the posterior lateral line, using morpholino knockdown and PrP2 targeted inactivation. We confirm the efficiency of the translation blocking morpholino at the protein level. Development of the posterior lateral line is altered in PrP2 morphants, including nerve axonal outgrowth and primordium migration defects. Reduced neuromast deposition was observed in PrP2 morphants as well as in PrP2-/- mutants. Rosette formation defects were observed in PrP2 morphants, strongly suggesting an abnormal primordium organization and reflecting loss of cell cohesion during migration of the primordium. In addition, the adherens junction proteins, E-cadherin and ß-catenin, were mis-localized after reduction of PrP2 expression and thus contribute to the primordium disorganization. Consequently, hair cell differentiation and number were affected and this resulted in reduced functional neuromasts. At later developmental stages, myelination of the posterior lateral line nerve was altered. Altogether, our study reports an essential role of PrP2 in collective migration process of the primordium and in neuromast formation, further implicating a role for prion protein in cell adhesion.