Cellular prion protein (PrPC) is a mammalian glycoprotein which is usually found anchored to the plasma membrane via a glycosylphosphatidylinositol (GPI) anchor. The precise function of PrPC remains elusive but may depend upon its cellular localization. PrPC misfolds to a pathogenic isoform PrPSc, the causative agent of neurodegenerative prion diseases. Nonetheless some forms of prion disease develop in the apparent absence of infectious PrPSc, suggesting that molecular species of PrP distinct from PrPSc may represent the primary neurotoxic culprits. Indeed, in some inherited cases of human prion disease, the predominant form of PrP detectable in the brain is not PrPSc but rather CtmPrP, a transmembrane form of the protein. The relationship between the neurodegeneration occurring in prion diseases involving PrPSc and that associated with CtmPrP remains unclear. However, the different membrane topology of the PrP mutants, as well as the presence of the GPI anchor, could influence both the function and the intracellular localization and trafficking of the protein, all being potentially very important in the pathophysiological mechanism that ultimately causes the disease. Here, we review the latest findings on the fundamental aspects of prions biology, from the PrPC biosynthesis, function, and structure up to its intracellular traffic and analyze the possible roles of the different topological isoforms of the protein, as well as the GPI anchor, in the pathogenesis of the disease.