Point mutations M232R (PrP(232R)), M232T (PrP(232T)), and P238S (PrP(238S)) in the glycosylphosphatidylinositol signal peptide (GPI-SP) of the prion protein (PrP(C)) segregate with familial Creutzfeldt-Jakob disease (CJD). However, the mechanism by which these mutations induce cytotoxicity is unclear since the GPI-SP is replaced by a GPI anchor within 5 min of PrP synthesis and translocation into the endoplasmic reticulum (ER). To examine if mutations in this region interfere with translocation of nascent PrP into the ER or anchor addition, the metabolism of PrP(232R) and PrP(232T) was investigated in transfected human neuroblastoma cells. In this report, we demonstrate that PrP mutations M232R and M232T do not interfere with GPI anchor addition. Instead, these mutations increase the stability and transport of GPI-SP mediated post-translationally translocated PrP to the plasma membrane, where it is linked to the lipid bilayer in a potentially neurotoxic C-transmembrane ((Ctm)PrP) orientation. Furthermore, we demonstrate that the GPI-SP of PrP functions as an efficient co-translational and inefficient post-translational ER translocation signal when tagged to an unrelated protein, underscoring the functional versatility of this peptide. These data uncover an alternate pathway of ER translocation for nascent PrP, and provide information on the possible mechanism(s) of neurotoxicity by mutations in the GPI-SP.