The cellular prion protein (PrP C) is a glycosylphosphatidylinositol (GPI)-anchored protein present at the cell surface. PrP C N-terminal moiety is intrinsically disordered and is able to interact with a variety of ligands. Physiological ligands have neurotrophic activity, whilst others, including protein toxic oligomers, have neurotoxic functions. These two opposite activities involve different interacting partners and result from different PrP C-activated signaling pathways. Remarkably, PrP C may be inactivated either by physiological endoproteolysis and release of the N-terminal domain, or by ectodomain shedding. Ligand-induced PrP C dimerization or enforced dimerization of PrP C indicate that PrP C dimerization represents an important molecular switch for both intracellular signaling and inactivation by the release of PrP C N-terminal domain or shedding. In this review, we summarize evidence that cell surface receptor activity of PrP C is finely regulated by dimerization.