There is now strong evidence to show that the presence of the cellular prion protein (PrPc) mediates amyloid-β (Aβ) neurotoxicity in Alzheimer's disease (AD). Here, we probe the molecular details of the interaction between PrP and Aβ and discover that substoichiometric amounts of PrPc, as little as 1/20, relative to Aβ will strongly inhibit amyloid fibril formation. This effect is specific to the unstructured N-terminal domain of PrPc. Electron microscopy indicates PrPc is able to trap Aβ in an oligomeric form. Unlike fibers, this oligomeric Aβ contains antiparallel β sheet and binds to a oligomer specific conformational antibody. Our NMR studies show that a specific region of PrPc, notably residues 95-113, binds to Aβ oligomers, but only once Aβ misfolds. The ability of PrPc to trap and concentrate Aβ in an oligomeric form and disassemble mature fibers suggests a mechanism by which PrPc might confer Aβ toxicity in AD, as oligomers are thought to be the toxic form of Aβ. Identification of a specific recognition site on PrPc that traps Aβ in an oligomeric form is potentially a therapeutic target for the treatment of Alzheimer's disease.