Prion diseases are neurodegenerative disorders associated with a conformational change in the normal cellular isoform of the prion protein, PrP(C), to an abnormal scrapie isoform, PrP(SC). Unlike the alpha-helical PrP(C), the protease-resistant core of PrP(SC) is predominantly beta-sheet and possesses a tendency to polymerize into amyloid fibrils. We performed experiments with two synthetic human prion peptides, PrP(106-126) and PrP(127-147), to determine how peptide structure affects neurotoxicity and protein-membrane interactions. Peptide solutions possessing beta-sheet and amyloid structures were neurotoxic to PC12 cells in vitro and bound with measurable affinities to cholesterol-rich phospholipid membranes at ambient conditions, but peptide solutions lacking stable beta-sheet structures and amyloid content were nontoxic and possessed less than one tenth of the binding affinities of the amyloid-containing peptides. Regardless of structure, the peptide binding affinities to cholesterol-depleted membranes were greatly reduced. These results suggest that the beta-sheet and amyloid structures of the prion peptides give rise to their toxicity and membrane binding affinities and that membrane binding affinity, especially in cholesterol-rich environments, may be related to toxicity. Our results may have significance in understanding the role of the fibrillogenic cerebral deposits associated with some of the prion diseases in neurodegeneration and may have implications for other amyloidoses.