Background: Prionopathies are characterized by spongiform brain degeneration, myoclonia, dementia, and periodic electroencephalographic (EEG) disturbances. The hallmark of prioniopathies is the presence of an abnormal conformational isoform (PrP(sc)) of the natural cellular prion protein (PrP(c)) encoded by the Prnp gene. Although several roles have been attributed to PrP(c), its putative functions in neuronal excitability are unknown. Although early studies of the behavior of Prnp knockout mice described minor changes, later studies report altered behavior. To date, most functional PrP(c) studies on synaptic plasticity have been performed in vitro. To our knowledge, only one electrophysiological study has been performed in vivo in anesthetized mice, by Curtis and coworkers. They reported no significant differences in paired-pulse facilitation or LTP in the CA1 region after Schaffer collateral/commissural pathway stimulation. Principal Findings: Here we explore the role of PrP(c) expression in neurotransmission and neural excitability using wild-type, Prnp -/- and PrP(c)-overexpressing mice (Tg20 strain). By correlating histopathology with electrophysiology in living behaving mice, we demonstrate that both Prnp -/- mice but, more relevantly Tg20 mice show increased susceptibility to KA, leading to significant cell death in the hippocampus. This finding correlates with enhanced synaptic facilitation in paired-pulse experiments and hippocampal LTP in living behaving mutant mice. Gene expression profiling using Illumina microarrays and Ingenuity pathways analysis showed that 129 genes involved in canonical pathways such as Ubiquitination or Neurotransmission were co-regulated in Prnp -/- and Tg20 mice. Lastly, RT-qPCR of neurotransmission-related genes indicated that subunits of GABA(A) and AMPA-kainate receptors are co-regulated in both Prnp -/- and Tg20 mice. Conclusions/Significance: Present results demonstrate that PrP(c) is necessary for the proper homeostatic functioning of hippocampal circuits, because of its relationships with GABA(A) and AMPA-Kainate neurotransmission. New PrP(c) functions have recently been described, which point to PrP(c) as a target for putative therapies in Alzheimer's disease. However, our results indicate that a "gain of function" strategy in Alzheimer's disease, or a "loss of function" in prionopathies, may impair PrP(c) function, with devastating effects. In conclusion, we believe that present data should be taken into account in the development of future therapies.