Protein aggregation is typically attributed to the association of homologous amino acid sequences between monomers of the same protein. Coaggregation of heterogeneous peptide species can occur, however, and is implicated in the proliferation of seemingly unrelated protein diseases in the body. The prion protein fragment (PrP106-126) and human islet amyloid polypeptide (hIAPP) serve as an interesting model of nonhomologous protein assembly as they coaggregate, despite a lack of sequence homology. We have applied ion-mobility mass spectrometry, atomic force microscopy, circular dichroism, and high-level molecular modeling to elucidate this important assembly process. We found that the prion fragment not only forms pervasive hetero-oligomeric aggregates with hIAPP but also promotes the transition of hIAPP into its amyloidogenic beta-hairpin conformation. Further, when PrP106-126 was combined with non-amyloidogenic rIAPP, the two formed nearly identical hetero-oligomers to those seen with hIAPP, despite rIAPP containing beta-sheet breaking proline substitutions. Additionally, while rIAPP does not natively form the amyloidogenic beta-hairpin structure, it did so in the presence of PrP106-126 and underwent a conformational transition to beta-sheet in solution. We also find that PrP106-126 forms hetero-oligomers with the IAPP(8-20) fragment but not with the "aggregation hot spot" IAPP(20)(-29) fragment. PrP106-126 apparently induces IAPP into a beta-hairpin structure within the PrP:IAPP heterodimer complex and then, through ligand exchange, catalytically creates the amyloidogenic beta-hairpin dimer of IAPP in significantly greater abundance than IAPP does on its own. This is a new mechanistic model that provides a critical foundation for the detailed study of hetero-oligomerization and prion-like proliferation in amyloid systems.