The neurodegeneration seen in spongiform encephalopathies is believed to be mediated by protease-resistant forms of the prion protein (PrP). A peptide encompassing residues 106-126 of human PrP has been shown to be neurotoxic in vitro. The neurotoxicity of PrP106-126 appears to be dependent upon its adoption of an aggregated fibril structure. To examine the role of the hydrophobic core, AGAAAAGA, on PrP106-126 toxicity, we performed structure-activity analyses by substituting two or more hydrophobic residues for the hydrophilic serine residue to decrease its hydrophobicity. A peptide with a deleted alanine was also synthesized. We found all the peptides except the deletion mutant were no longer toxic on mouse cerebellar neuronal cultures. Circular dichroism analysis showed that the nontoxic PrP peptides had a marked decrease in beta-sheet structure. In addition, the mutants had alterations in aggregability as measured by turbidity, Congo red binding, and fibril staining using electron microscopy. These data show that the hydrophobic core sequence is important for PrP106-126 toxicity probably by influencing its assembly into a neurotoxic structure. The hydrophobic sequence may similarly affect aggregation and toxicity observed in prion diseases.