A wealth of evidence supports the view that conformational change of the prion protein, PrP^C, into a pathogenic isoform, PrP^Sc, is the hallmark of sporadic, infectious, and inherited forms of prion disease. Although the central role played by PrP^Sc in the pathogenesis of prion disease is appreciated, the cellular mechanisms that recognize PrP^Sc and modulate its production, clearance, and neural toxicity have not been elucidated. To address these questions, we used a tissue‐specific expression system to express wild‐type and disease‐associated PrP molecules heterologously in Drosophila melanogaster. Our results indicate that Drosophila brain possesses a specific and saturable mechanism that suppresses the accumulation of PG14, a disease‐associated insertional PrP mutant. We also found that wild‐type PrP molecules are maintained in a detergent‐soluble conformation throughout life in Drosophila brain neurons, whereas they become detergent‐insoluble in retinal cells as flies age. PG14 protein expression in Drosophila eye did not cause retinal pathology. Our work reveals the presence of mechanisms in neurons that specifically counterbalance the production of misfolded PrP conformations, and provides an opportunity to study these processes in a model organism amenable to genetic analysis.