Prion diseases, also known as transmissible spongiform encephalopathies, are infectious fatal neurodegenerative diseases of humans and animals. A major feature of prion diseases is the refolding and aggregation of a normal host protein, prion protein (PrP), into a disease-associated form which may contribute to brain damage. In uninfected individuals, normal PrP is anchored to the outer cell membrane by a sugar-phosphate-lipid linker molecule. This report shows that prion infection of mice expressing PrP lacking the anchor can result in a new type of fatal neurodegenerative disease. The disease displays mechanisms of damage to brain cells and brain blood vessels found in Alzheimer’s disease and in familial amyloid brain diseases. In contrast, the typical sponge-like brain damage seen in prion diseases was not observed. These results suggest that presence or absence of PrP membrane anchoring can influence the type of neurodegeneration seen after prion infection. Understanding these interactiions could lead to new therapeutic approaches.