Prion protein (PrP) is highly conserved and is expressed in most tissues in a developmental stage-specific manner. Glycosylated cellular prion protein (PrP<sup>C</sup>) is found in most cells and subcellular areas as a physiological regulating molecule. On the other hand, the amyloid form of PrP<sup>C</sup>, scrapie PrP (PrP<sup>SC</sup>), causes transmissible pathogenesis in the central nervous system and induces degeneration of the nervous system. Although many amyloids are reversible and critical in determining the fate, differentiation, and physiological functions of cells, thus far, PrP<sup>SC</sup> originating from PrP<sup>C</sup> is not. Although many studies have focused on disorders involving PrP<sup>C</sup> and the deletion mammalian models for PrP<sup>C</sup> have no severe phenotype, it has been suggested that PrP<sup>C</sup> has a role in normal development. It is conserved and expressed from gametes to adult somatic cells. In addition, severe developmental phenotypes appear in PrP null zebrafish embryos and in various mammalian cell model systems. In addition, it has been well established that PrP<sup>C</sup> is strongly involved in the stemness and differentiation of embryonic stem cells and progenitors. Thus far, many studies on PrP<sup>C</sup> have focused mostly on disease-associated conditions with physiological roles as a complex platform but not on development. The known roles of PrP<sup>C</sup> depend on the interacting molecules through its flexible tail and domains. PrP<sup>C</sup> interacts with membrane, and various intracellular and extracellular molecules. In addition, PrP<sup>C</sup> and amyloid can stimulate signaling pathways differentially. In this review, we summarize the function of prion protein and discuss its role in development.