Prion protein (PrP) plays a crucial role in prion disease, but its physiological function remains unclear. Mice with gene deletions restricted to the coding region of PrP have only minor phenotypic deficits, but are resistant to prion disease. We generated double transgenic mice using the Cre-loxP system to examine the effects of PrP depletion on neuronal survival and function in adult brain. Cre-mediated ablation of PrP in neurons occurred after 9 weeks. We found that the mice remained healthy without evidence of neurodegeneration or other histopathological changes for up to 15 months post-knockout. However, on neurophysiological evaluation, they showed significant reduction of afterhyperpolarization potentials (AHPs) in hippocampal CA1 cells, suggesting a direct role for PrP in the modulation of neuronal excitability. These data provide new insights into PrP function. Furthermore, they show that acute depletion of PrP does not affect neuronal survival in this model, ruling out loss of PrP function as a pathogenic mechanism in prion disease and validating therapeutic approaches targeting PrP.