Prions are proteins that can adopt self-perpetuating conformations and are traditionally regarded as etiological agents of infectious neurodegenerative diseases in humans, such as Creutzfeldt-Jakob disease, kuru, and transmissible encephalopathies. More recently, a growing consensus has emerged that prion-like, self-templating mechanisms also underlie a variety of neurodegenerative disorders, including amyotrophic lateral sclerosis, Alzheimer's disease, and Huntington's disease. Perhaps most surprising, not all prion-like aggregates are associated with pathological changes. There are now several examples of prion-like proteins in mammals that serve positive biological functions in their aggregated state. In this review, we discuss functional prions in the nervous system, with particular emphasis on the cytoplasmic polyadenylation element-binding protein (CPEB) and the role of its prion-like aggregates in synaptic plasticity and memory. We also mention a more recent example of a functional prion-like protein in the brain, TIA-1, and its role during stress. These studies of functional prion-like proteins have provided a number of generalizable insights on how prion-based protein switches may operate to serve physiological functions in higher eukaryotes.