In the past decade, manipulation of PrP genes by transgenesis in mice has provided important insights into mechanisms of prion propagation and the molecular basis of prion strains and species barriers. Despite these advances, our understanding of these unique pathogens is far from complete. This review focuses on PrP gene knockout and gene replacement studies, PrP structure and function, and transgenic models of human and animal prion diseases. Transgenic approaches will doubtless remain the cornerstone of investigations into the prion diseases in the coming years, which will include mechanistic studies of prion pathogenesis and prion transmission barriers. Transgenic models will also be important tools for the evaluation of potential therapeutic agents for prion diseases.