The infectious agent in prion diseases consists of an aberrantly folded isoform of the cellular prion protein (PrP c), termed PrP Sc, which accumulates in brains of affected individuals. Studies on prion-infected cultured cells indicate that cellular cholesterol homeostasis influences PrP Sc propagation. Here, we demonstrate that the cellular PrP Sc content decreases upon accumulation of cholesterol in late endosomes, as induced by NPC-1 knock-down or treatment with U18666A. PrP c trafficking, lipid raft association, and membrane turnover are not significantly altered by such treatments. Cellular PrP Sc formation is not impaired, suggesting that PrP Sc degradation is increased by intracellular cholesterol accumulation. Interestingly, PrP Sc propagation in U18666A-treated cells was partially restored by overexpression of rab 9, which causes redistribution of cholesterol and possibly of PrP Sc to the trans-Golgi network. Surprisingly, rab 9 overexpression itself reduced cellular PrP Sc content, indicating that PrP Sc production is highly sensitive to alterations in dynamics of vesicle trafficking.