The normal cellular isoform of prion protein, designated PrPC, is constitutively converted to the abnormally folded, amyloidogenic isoform, PrPSc, in prion diseases, which include Creutzfeldt-Jakob disease in humans and scrapie and bovine spongiform encephalopathy in animals. PrPC is a membrane glycoprotein consisting of the non-structural N-terminal domain and the globular C-terminal domain. During conversion of PrPC to PrPSc, its 2/3 C-terminal region undergoes marked structural changes, forming a protease-resistant structure. In contrast, the N-terminal region remains protease-sensitive in PrPSc. Reverse genetic studies using reconstituted PrPC-knockout mice with various mutant PrP molecules have revealed that the N-terminal domain has an important role in the normal function of PrPC and the conversion of PrPC to PrPSc. The N-terminal domain includes various characteristic regions, such as the positively charged residue-rich polybasic region, the octapeptide repeat (OR) region consisting of five repeats of an octapeptide sequence, and the post-OR region with another positively charged residue-rich polybasic region followed by a stretch of hydrophobic residues. We discuss the normal functions of PrPC, the conversion of PrPC to PrPSc, and the neurotoxicity of PrPSc by focusing on the roles of the N-terminal regions in these topics.