Since the discovery of the prion protein (PrP) gene more than a decade ago, transgenetic investigations on the PrP gene have shaped the field of prion biology in an unprecedented way. Many questions regarding the role of PrP in susceptibility of an organism exposed to prions have been elucidated. For example mice with a targeted disruption of the PrP gene have allowed the demonstration that an organism that lacks PrPc is resistant to infection by prions. Reconstitution of these mice with mutant PrP genes allowed investigations on the structure-activity relationship of the PrP gene with regard to scrapie susceptibility. Unexpectedly, transgenic mice expressing PrP with specific amino-proximal truncations spontaneously develop a neurologic syndrome presenting with ataxia and cerebellar lesions. A distinct spontaneous neurologic phenotype was observed in mice with internal deletions in PrP. Using ectopic expression of PrP in PrP knockout mice has turned out to be a valuable approach towards the identification of host cells that are capable of replicating prions. Transgenic mice have also contributed to our understanding of the molecular basis of the species barrier for prions. Finally, the availability of PrP knockout mice and transgenic mice overexpressing PrP allows selective reconstitution experiments aimed at expressing PrP in neurografts or in specific populations of hemato- and lymphopoietic cells. Such studies have shed new light onto the mechanisms of prion spread and disease pathogenesis.