Background: C1 is the main physiological cleavage fragment of PrP, but its role in disease is unknown. Results: C1 is not toxic when expressed in mice and delays the onset of disease and PrP Sc formation when co-expressed with WT PrP. Conclusion: C1 is a dominant-negative inhibitor of PrP Sc formation. Significance: Modulation of C1 cleavage may represent a therapeutic strategy for combating PrP Sc infection.The cellular prion protein (PrP C ) undergoes constitutive proteolytic cleavage between residues 111/112 to yield a soluble N-terminal fragment (N1) and a membrane-anchored C-terminal fragment (C1). The C1 fragment represents the major proteolytic fragment of PrP C in brain and several cell types. To explore the role of C1 in prion disease, we generated Tg(C1) transgenic mice expressing this fragment (PrP(⌬23-111)) in the presence and absence of endogenous PrP. In contrast to several other N-terminally deleted forms of PrP, the C1 fragment does not cause a spontaneous neurological disease in the absence of endogenous PrP. Tg(C1) mice inoculated with scrapie prions remain healthy and do not accumulate protease-resistant PrP, demonstrating that C1 is not a substrate for conversion to PrP Sc (the disease-associated isoform). Interestingly, Tg(C1) mice coexpressing C1 along with wild-type PrP (either endogenous or encoded by a second transgene) become ill after scrapie inoculation, but with a dramatically delayed time course compared with mice lacking C1. In addition, accumulation of PrP Sc was markedly slowed in these animals. Similar effects were produced by a shorter C-terminal fragment of PrP(⌬23-134). These results demonstrate that C1 acts as dominant-negative inhibitor of PrP Sc formation and accumulation of neurotoxic forms of PrP. Thus, C1, a naturally occurring fragment of PrP C , might play a modulatory role during the course of prion diseases. In addition, enhancing production of C1, or exogenously administering this fragment, represents a potential therapeutic strategy for the treatment of prion diseases.Transmissible spongiform encephalopathies such as Creutzfeldt-Jakob disease and bovine spongiform encephalopathy are fatal neurodegenerative disorders whose pathology is associated with propagation of prions, novel infectious agents whose transmission is based on changes in protein conformation rather than inheritance of nucleic acid sequence (1). Prion propagation depends on conversion of an endogenous cellular glycoprotein (PrP C ) 2 into an aggregated, protease-resistant isoform (PrP Sc ) that is rich in -sheet structure (1-4). PrP C is synthesized on endoplasmic reticulum-attached ribosomes and transits the secretory pathway to the cell surface, where most molecules are attached to the outer leaflet of the lipid bilayer via a C-terminal glycosylphosphatidylinositol (GPI) anchor (5). Most of the protein resides in lipid rafts on the plasma membrane, although some molecules are constitutively endocytosed via clathrin-coated pits and are then recycled back to the cell surface (6 -9).After its synth...