The function of the prion protein gene (PRNP) and its normal product PrP^C is elusive. We used comparative genomics as a strategy to understand the normal function of PRNP. As the reliability of comparisons increases with the number of species and increased evolutionary distance, we isolated and sequenced a 66.5 kb BAC containing the PRNP gene from a distantly related mammal, the model Australian marsupial Macropus eugenii (tammar wallaby). Marsupials are separated from eutherians such as human and mouse by roughly 180 million years of independent evolution. We found that tammar PRNP, like human PRNP, has two exons. Prion proteins encoded by the tammar wallaby and a distantly related marsupial, Monodelphis domestica (Brazilian opossum) PRNP contain proximal PrP repeats with a distinct, marsupial-specific composition and a variable number. Comparisons of tammar wallaby PRNP with PRNPs from human, mouse, bovine and ovine allowed us to identify non-coding gene regions conserved across the marsupial–eutherian evolutionary distance, which are candidates for regulatory regions. In the PRNP 3′ UTR we found a conserved signal for nuclear-specific polyadenylation and the putative cytoplasmic polyadenylation element (CPE), indicating that post-transcriptional control of PRNP mRNA activity is important. Phylogenetic footprinting revealed conserved potential binding sites for the MZF-1 transcription factor in both upstream promoter and intron/intron 1, and for the MEF2, MyT1, Oct-1 and NFAT transcription factors in the intron(s). The presence of a conserved NFAT-binding site and CPE indicates involvement of PrP^C in signal transduction and synaptic plasticity.