The assembly of misfolded proteins is a critical step in the pathogenesis of amyloid and prion diseases, although the molecular mechanisms underlying this phenomenon are not completely understood. Here, we use F-19 NMR spectroscopy to examine the thermodynamic driving forces surrounding formation of beta-sheet-rich oligomers early in the misfolding and aggregation pathway of the mammalian prion protein. We show that initial assembly of a small octameric intermediate is entropically driven, while further assembly to putative prefibrillar aggregates is driven by a favorable change in enthalpy. Kinetic data suggest that formation of the beta-octamer represents a rate-limiting step in the assembly of prion aggregates. A disease-related mutation (F198S) known to destabilize the native state of PrP was also found to stabilize the beta-octamer, suggesting that it can influence susceptibility to prion disease through two distinct mechanisms. This study provides new insight into the misfolding pathway leading to critical oligomers of the prion protein and suggests a physical basis for increased assembly of the F198S mutant.