The mouse neuroblastoma cell line N2a was persistently infected with the Chandler strain of the mouse scrapie agent. Although the infection did not spread to infect > 1% of the cells, clones were established that had from 50 to 100% infected cells. These clones expressed the abnormal protease-resistant form of prion protein (PrP), which is believed to mediate brain degeneration in animals with scrapie and bovine spongiform encephalopathy and in humans with kuru, Creutzfeldt-Jakob disease, and Gerstmann-Straussler-Scheinker syndrome. With this in vitro system, Congo red and several sulfated polysaccharides, including heparin and pentosan polysulfate, were found to inhibit accumulation of protease-resistant PrP. These results and additional data confirming PrP binding to heparin suggested a possible role for sulfated glycosaminoglycans in the generation of protease-resistant PrP during scrapie infection. Accumulation of protease-resistant PrP was also blocked in vitro by expression of foreign PrP molecules, indicating that PrP from different species might compete for common substrates in this process. These results using scrapie-infected cell lines provide new opportunities for development of drugs capable of blocking the brain degeneration caused by scrapie and other transmissible spongiform encephalopathies.