The conformational conversion of prion protein (PrP) from an alpha-helix-rich normal cellular isoform (PrPC) to a beta-sheet-rich pathogenic isoform (PrPSc) is a key event in the development of prion diseases, and it takes place in caveolae, cavelike invaginations of the plasma membrane. A peptide homologous to residues 106-126 of human PrP (PrP106-126) is known to share several properties with PrPSc, e.g., the capability to form a beta-sheet and toxicity against PrPC-expressing cells. PrP106-126 is thus expected to represent a segment of PrP that is involved in the formation of PrPSc. We have examined the effect of lipid membranes containing negatively charged ganglioside, an important component of caveolae, on the secondary structure of PrP106-126 by circular dichroism. The peptide forms an alpha-helical or a beta-sheet structure on the ganglioside-containing membranes. The beta-sheet content increases with an increase of the peptide:lipid ratio, indicating that the beta-sheet formation is linked with self-association of the positively charged peptide on the negatively charged membrane surface. Analogous beta-sheet formation is also induced by membranes composed of negatively charged and neutral glycerophospholipids with high and low melting temperatures, respectively, in which lateral phase separation and clustering of negatively charged lipids occur as shown by Raman spectroscopy. Since ganglioside-containing membranes also exhibit lateral phase separation, clustered negative charges are concluded to be responsible for the beta-sheet formation of PrP106-126. In caveolae, clustered ganglioside molecules are likely to interact with the residue 106-126 region of PrPC to promote the PrPC-to-PrPSc conversion.