Alzheimer and prion diseases are neurodegenerative disorders characterised by the abnormal processing of amyloid-beta (Abeta) peptide and prion protein (PrP(C)), respectively. Recent evidence indicates that PrP(C) may play a critical role in the pathogenesis of Alzheimer disease. PrP(C) interacts with and inhibits the beta-secretase BACE1, the rate-limiting enzyme in the production of Abeta. More recently PrP(C) was identified as a receptor for Abeta oligomers and the expression of PrP(C) appears to be controlled by the amyloid intracellular domain (AICD). Here we review these observations and propose a feedback loop in the normal brain where PrP(C) exerts an inhibitory effect on BACE1 to decrease both Abeta and AICD production. In turn, the AICD upregulates PrP(C) expression, thus maintaining the inhibitory effect of PrP(C) on BACE1. In Alzheimer disease, this feedback loop is disrupted, and the increased level of Abeta oligomers bind to PrP(C) and prevent it from regulating BACE1 activity.