The prion diseases occur following the conversion of the cellular prion protein (PrP(C)) into disease-related isoforms (PrP(Sc)). In this study, the role of the glycosylphosphatidylinositol (GPI) anchor attached to PrP(C) in prion formation was examined using a cell painting technique. PrP(Sc) formation in two prion-infected neuronal cell lines (ScGT1 and ScN2a cells) and in scrapie-infected primary cortical neurons was increased following the introduction of PrP(C). In contrast, PrP(C) containing a GPI anchor from which the sialic acid had been removed (desialylated PrP(C)) was not converted to PrP(Sc). Furthermore, the presence of desialylated PrP(C) inhibited the production of PrP(Sc) within prion-infected cortical neurons and ScGT1 and ScN2a cells. The membrane rafts surrounding desialylated PrP(C) contained greater amounts of sialylated gangliosides and cholesterol than membrane rafts surrounding PrP(C). Desialylated PrP(C) was less sensitive to cholesterol depletion than PrP(C) and was not released from cells by treatment with glimepiride. The presence of desialylated PrP(C) in neurons caused the dissociation of cytoplasmic phospholipase A2 from PrP-containing membrane rafts and reduced the activation of cytoplasmic phospholipase A2. These findings show that the sialic acid moiety of the GPI attached to PrP(C) modifies local membrane microenvironments that are important in PrP-mediated cell signaling and PrP(Sc) formation. These results suggest that pharmacological modification of GPI glycosylation might constitute a novel therapeutic approach to prion diseases.