Prions are infectious proteins that cause fatal neurodegenerative disorders including Creutzfeldt-Jakob and bovine spongiform encephalopathy (mad cow) diseases. The yeast [PSI+] prion is formed by the translation-termination factor Sup35, is the best-studied prion, and provides a useful model system for studying such diseases. However, despite recent progress in the understanding of prion diseases, the cellular defense mechanism against prions has not been elucidated. Here, we report that proteolytic cleavage of Sup35 suppresses spontaneous de novo generation of the [PSI+] prion. We found that during yeast growth in glucose media, a maximum of 40% of Sup35 is cleaved at its N-terminal prion domain. This cleavage requires the vacuolar proteases PrA-PrB. Cleavage occurs in a manner dependent on translation but independently of autophagy between the glutamine/asparagine-rich (Q/N-rich) stretch critical for prion formation and the oligopeptide-repeat region required for prion maintenance, resulting in the removal of the Q/N-rich stretch from the Sup35 N terminus. The complete inhibition of Sup35 cleavage, by knocking out either PrA (pep4Δ) or PrB (prb1Δ), increased the rate of de novo formation of [PSI+] prion up to ∼5-fold, whereas the activation of Sup35 cleavage, by overproducing PrB, inhibited [PSI+] formation. On the other hand, activation of the PrB pathway neither cleaved the amyloid conformers of Sup35 in [PSI+] strains nor eliminated preexisting [PSI+]. These findings point to a mechanism antagonizing prion generation in yeast. Our results underscore the usefulness of the yeast [PSI+] prion as a model system to investigate defense mechanisms against prion diseases and other amyloidoses.