The mammalian cellular prion protein (PrP(C)) is a highly conserved glycoprotein that may undergo conversion into a conformationally altered isoform (scrapie prion protein or PrP(Sc)), widely believed to be the pathogenic agent of transmissible spongiform encephalopathies (TSEs). Although much is known about pathogenic PrP conversion and its role in TSEs, the normal function of PrP(C) is poorly understood. Given the abundant expression of PrP(C) in the developing mammalian CNS and the spatial association with differentiated stages of neurogenesis, recently it has been proposed that PrP(C) participates in neural cell differentiation. In the present study, we investigated the role of PrP(C) in neural development during early embryogenesis. In bovine fetuses, PrP(C) was differentially expressed in the neuroepithelium, showing higher levels at the intermediate and marginal layers where more differentiated states of neurogenesis were located. We utilized differentiating mouse embryonic stem (ES) cells to test whether PrP(C) contributed to the process of neural differentiation during early embryogenesis. PrP(C) showed increasing levels of expression starting on Day 9 until Day 18 of ES cell differentiation. PrP(C) expression was negatively correlated with pluripotency marker Oct-4 confirming that ES cells had indeed differentiated. Induction of ES cells differentiation by retinoic acid (RA) resulted in up-regulation of PrP(C) at Day 20 and nestin at Day 12. PrP(C) expression was knocked down in PrP-targeted siRNA ES cells between Days 12 and 20. PrP(C) knockdown in ES cells resulted in nestin reduction at Days 16 and 20. Analysis of bovine fetuses suggests the participation of PrP(C) in neural cell differentiation during early embryogenesis. The positive association between PrP(C) and nestin expression provide evidence for the contribution of PrP(C) to ES cell differentiation into neural progenitor cells.