Defects in cellular localization and trafficking seem to facilitate the conversion of PrP(C) into the disease-associated form, PrP(Sc). Still, it is not clear to which membrane compartments PrP(C) localizes in hippocampal neurons a population most affected in the prion disease. We here show that in developing hippocampal neurons in culture PrP(C) is equally distributed to all neurites yet enriched in growth cones. By contrast, in fully mature neurons PrP(C) is restricted to axons. The axonal distribution in mature stages is paralleled by the increased partitioning of PrP(C) into detergent-resistant cholesterol-sphingolipid-rich domains (DRMs). Consistent with a cause-effect mechanism, disruption of DRMs by sphingolipid or cholesterol depletion leads to the non-polarized distribution and impaired endocytosis of PrP(C). These results indicate that DRMs are essential for proper trafficking and distribution of PrP(C) at late stages of neuronal differentiation and that its function, at least in hippocampus, is restricted to the axonal domain.