The human cellular prion protein (PrPC) is a glycosylphosphatidylinositol (GPI) anchored membrane glycoprotein with two N-glycosylation sites at residues 181 and 197. This protein migrates in several bands by Western blot analysis (WB). Interestingly, PNGase F treatment of human brain homogenates prior to the WB, which is known to remove the N-glycosylations, unexpectedly gives rise to two dominant bands, which are now known as C-terminal (C1) and N-terminal (N1) fragments. This resembles the β-amyloid precursor protein (APP) in Alzheimer disease (AD), which can be physiologically processed by α-, β-, and γ-secretases. The processing of APP has been extensively studied, while the identity of the cellular proteases involved in the proteolysis of PrPC and their possible role in prion biology has remained limited and controversial. Nevertheless, there is a strong correlation between the neurotoxicity caused by prion proteins and the blockade of their normal proteolysis. For example, expression of non-cleavable PrPC mutants in transgenic mice generates neurotoxicity, even in the absence of infectious prions, suggesting that PrPC proteolysis is physiologically and pathologically important. As many mouse models of prion diseases have recently been developed and the knowledge about the proteases responsible for the PrPC proteolysis is accumulating, we examine the historical experimental evidence and highlight recent studies that shed new light on this issue.