After infection with RML murine scrapie agent, transgenic (tg) mice expressing prion protein (PrP) without its glycophosphatidylinositol (GPI) membrane anchor (GPI(-/-) PrP tg mice) continue to make abundant amounts of the abnormally folded disease-associated PrPres but have a normal life span. In contrast, all age-, sex-, and genetically matched mice with a GPI-anchored PrP become moribund and die due to a chronic progressive neurodegenerative disease by 160 days after RML scrapie agent infection. We report here that infected GPI(-/-) PrP tg mice, although free from progressive neurodegenerative disease of the cerebellum and extrapyramidal and pyramidal systems, nevertheless suffer defects in learning and memory, long-term potentiation, and neuronal excitability. Such dysfunction increases over time and is associated with an increase in gamma aminobutyric acid (GABA) inhibition but not loss of excitatory glutamate/N-methyl-d-aspartic acid. Enhanced deposition of abnormally folded infectious PrP (PrPsc or PrPres) in the central nervous system (CNS) localizes with GABAA receptors. This occurs with minimal evidence of CNS spongiosis or apoptosis of neurons. The use of monoclonal antibodies reveals an association of PrPres with GABAA receptors. Thus, the clinical defects of learning and memory loss in vivo in GPI(-/-) PrP tg mice infected with scrapie agent may likely involve the GABAergic pathway.