Prion diseases are associated with the conversion of cellular prion protein (PrP(C)) to toxic β-sheet isoforms (PrP(Sc)), which are reported to inhibit the ubiquitin-proteasome system (UPS). Accordingly, UPS substrates accumulate in prion-infected mouse brains, suggesting impairment of the 26S proteasome. A direct interaction between its 20S core particle and PrP isoforms was demonstrated by immunoprecipitation. β-PrP aggregates associated with the 20S particle, but did not impede binding of the PA26 complex, suggesting that the aggregates do not bind to its ends. Aggregated β-PrP reduced the 20S proteasome's basal peptidase activity, and the enhanced activity induced by C-terminal peptides from the 19S ATPases or by the 19S regulator itself, including when stimulated by polyubiquitin conjugates. However, the 20S proteasome was not inhibited when the gate in the α-ring was open due to a truncation mutation or by association with PA26/PA28. These PrP aggregates inhibit by stabilising the closed conformation of the substrate entry channel. A similar inhibition of substrate entry into the proteasome may occur in other neurodegenerative diseases where misfolded β-sheet-rich proteins accumulate.