Background: Prions and amyloid-β (Aβ) oligomers trigger neurodegeneration by hijacking a poorly understood cellular signal mediated by the prion protein (PrP) at the plasma membrane. In early zebrafish embryos, PrP-1-dependent signals control cell-cell adhesion via a tyrosine phosphorylation-dependent mechanism. Results: Here we report that the Src family kinases (SFKs) Fyn and Yes act downstream of PrP-1 to prevent the endocytosis and degradation of E-cadherin/β-catenin adhesion complexes in vivo. Accordingly, knockdown of PrP-1 or Fyn/Yes cause similar zebrafish gastrulation phenotypes, whereas Fyn/Yes expression rescues the PrP-1 knockdown phenotype. We also show that zebrafish and mouse PrPs positively regulate the activity of Src kinases and that these have an unexpected positive effect on E-cadherin-mediated cell adhesion. Interestingly, while PrP knockdown impairs β-catenin adhesive function, PrP overexpression enhances it, thereby antagonizing its nuclear, wnt-related signaling activity and disturbing embryonic dorsoventral specification. The ability of mouse PrP to influence these events in zebrafish embryos requires its neuroprotective, polybasic N-terminus but not its neurotoxicity-associated central region. Remarkably, human Aβ oligomers up-regulate the PrP-1/SFK/E-cadherin/β-catenin pathway in zebrafish embryonic cells, mimicking a PrP gain-of-function scenario. Conclusions: Our gain- and loss-of-function experiments in zebrafish suggest that PrP and SFKs enhance the cell surface stability of embryonic adherens junctions via the same complex mechanism through which they over-activate neuroreceptors that trigger synaptic damage. The profound impact of this pathway on early zebrafish development makes these embryos an ideal model to study the cellular and molecular events affected by neurotoxic PrP mutations and ligands in vivo. In particular, our finding that human Aβ oligomers activate the zebrafish PrP/SFK/E-cadherin pathway opens the possibility of using fish embryos to rapidly screen for novel therapeutic targets and compounds against prion- and Alzheimer's-related neurodegeneration. Altogether, our data illustrate PrP-dependent signals relevant to embryonic development, neuronal physiology and neurological disease.