Cellular prion protein (PrP(C)) is a cell surface glycoprotein that interacts with several ligands such as laminin, NCAM (Neural-Cell Adhesion Molecule) and the stress-inducible protein 1 (STI1). PrP(C) association with these proteins in neurons mediates adhesion, differentiation and protection against programmed cell death. Herein, we used an aversively motivated learning paradigm in rats to investigate whether STI1 interaction with PrP(C) affects short-term memory (STM) formation and long-term memory (LTM) consolidation. Blockage of PrP(C)-STI1 interaction with intra-hippocampal infusion of antibodies against PrP(C) or STI1 immediately after training impaired both STM and LTM. Furthermore, infusion of PrP(C) peptide 106-126, which competes for PrP(C)-STI1 interaction, also inhibited both forms of memory. Remarkably, STI1 peptide 230-245, which includes the PrP(C) binding site, had a potent enhancing effect on memory performance, which could be blocked by co-treatment with the competitive PrP(C) peptide 106-126. Taken together, these results demonstrate that PrP(C)-STI1 interaction modulates both STM and LTM and suggests a potential use of ST11 peptide 230-245 as a pharmacological agent.