Fatal familial insomnia (FFI) and a genetic form of Creutzfeldt-Jakob disease (CJD178) are clinically different prion disorders linked to the D178N prion protein (PrP) mutation. The disease phenotype is determined by the 129 M/V polymorphism on the mutant allele, which is thought to influence D178N PrP misfolding, leading to the formation of distinctive prion strains with specific neurotoxic properties. However, the mechanism by which misfolded variants of mutant PrP cause different diseases is not known. We generated transgenic (Tg) mice expressing the mouse PrP homolog of the FFI mutation. These mice synthesize a misfolded form of mutant PrP in their brains and develop a neurological illness with severe sleep disruption, highly reminiscent of FFI and different from that of analogously generated Tg(CJD) mice modeling CJD178. No prion infectivity was detectable in Tg(FFI) and Tg(CJD) brains by bioassay or protein misfolding cyclic amplification, indicating that mutant PrP has disease-encoding properties that do not depend on its ability to propagate its misfolded conformation. Tg(FFI) and Tg(CJD) neurons have different patterns of intracellular PrP accumulation associated with distinct morphological abnormalities of the endoplasmic reticulum and Golgi, suggesting that mutation-specific alterations of secretory transport may contribute to the disease phenotype.