Insight into the normal function of PrP(C), and how it can be subverted to produce neurotoxic effects, is provided by PrP molecules carrying deletions encompassing the conserved central region. The most neurotoxic of these mutants, Δ105-125 (called ΔCR), produces a spontaneous neurodegenerative illness when expressed in transgenic mice, and this phenotype can be dose-dependently suppressed by co-expression of wild-type PrP. Whether the toxic activity of ΔCR PrP and the protective activity or wild-type PrP are cell-autonomous, or can be exerted on neighboring cells, is unknown. To investigate this question, we have utilized co-cultures of differentiated neural stem cells derived from mice expressing ΔCR or wild-type PrP. Cells from the two kinds of mice, which are marked by the presence or absence of GFP, are differentiated together to yield neurons, astrocytes, and oligodendrocytes. As a surrogate read-out of ΔCR PrP toxicity, we assayed sensitivity of the cells to the cationic antibiotic, Zeocin. In a previous study, we reported that cells expressing ΔCR PrP are hypersensitive to the toxic effects of several cationic antibiotics, an effect that is suppressed by co-expression of wild type PrP, similar to the rescue of the neurodegenerative phenotype observed in transgenic mice. Using this system, we find that while ΔCR-dependent toxicity is cell-autonomous, the rescuing activity of wild-type PrP can be exerted in trans from nearby cells. These results provide important insights into how ΔCR PrP subverts a normal physiological function of PrP(C), and the cellular mechanisms underlying the rescuing process.