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Prion disease represents a group of fatal neurogenerative diseases in humans and animals that are associated with energy loss, axonal degeneration, and mitochondrial dysfunction. Axonal degeneration is an early hallmark of neurodegeneration and is triggered by SARM1. We found that depletion or dysfunctional mutation of SARM1 protected against NAD+ loss, axonal degeneration, and mitochondrial functional disorder induced by the neurotoxic peptide PrP106–126. NAD+ supplementation rescued prion-triggered axonal degeneration and mitochondrial dysfunction and SARM1 overexpression suppressed this protective effect. NAD+ supplementation in PrP106–126-incubated N2a cells, SARM1 depletion, and SARM1 dysfunctional mutation each blocked neuronal apoptosis and increased cell survival. Our results indicate that the axonal degeneration and mitochondrial dysfunction triggered by PrP106–126 are partially dependent on SARM1 NADase activity. This pathway has potential as a therapeutic target in the early stages of prion disease.