Prion diseases are transmissible spongiform encephalopathies (TSEs), attributed to conformational conversion of the cellular prion protein (PrP(C)) into an abnormal conformer that accumulates in the brain. Understanding the pathogenesis of TSEs requires the identification of functional properties of PrP(C). Here we examine the physiological functions of PrP(C) at the systemic, cellular, and molecular level. Current data show that both the expression and the engagement of PrP(C) with a variety of ligands modulate the following 1) functions of the nervous and immune systems, including memory and inflammatory reactions; 2) cell proliferation, differentiation, and sensitivity to programmed cell death both in the nervous and immune systems, as well as in various cell lines; 3) the activity of numerous signal transduction pathways, including cAMP/protein kinase A, mitogen-activated protein kinase, phosphatidylinositol 3-kinase/Akt pathways, as well as soluble non-receptor tyrosine kinases; and 4) trafficking of PrP(C) both laterally among distinct plasma membrane domains, and along endocytic pathways, on top of continuous, rapid recycling. A unified view of these functional properties indicates that the prion protein is a dynamic cell surface platform for the assembly of signaling modules, based on which selective interactions with many ligands and transmembrane signaling pathways translate into wide-range consequences upon both physiology and behavior.