The physiological role of prion protein (PrP) remains unknown. Mice devoid of PrP develop normally but are resistant to scrapie; introduction of a PrP transgene restores susceptibility to the disease. To identify the regions of PrP necessary for this activity, we prepared PrP knockout mice expressing PrPs with amino-proximal deletions. Surprisingly, PrP lacking residues 32–121 or 32–134, but not with shorter deletions, caused severe ataxia and neuronal death limited to the granular layer of the cerebellum as early as 1–3 months after birth. The defect was completely abolished by introducing one copy of a wild-type PrP gene. We speculate that these truncated PrPs may be nonfunctional and compete with some other molecule with a PrP-like function for a common ligand.