Raman scattering spectra of PrRu4P12 have been measured to clarify the mechanism underlying the metal-insulator transition occurring in this compound at T(subscript MI)=63 K. From the crystal electric field (CEF) excitation energies observed in the Raman spectra, the CEF level scheme is determined. A low-lying singlet-triplet CEF state is formed because of the competition between the field from the slightly transformed regular icosahedrons formed by the 12 P atoms and the cubic field from 8 coordination of Ru. The anomalous temperature dependence of the CEF excitation and phonon peak widths is strongly related to charge density wave (CDW) formation, which in turn is associated with the hybridization between the f and conduction electrons.