Pituitary adenylate cyclase-activating polypeptide (PACAP) is a neurotrophic peptide. Here, we show that PACAP recruits Rap1 into caveolin-enriched membrane subdomains in PC12 cells and activates Rap1, nuclear ERK1/2, Elk-1 and CREB in a caveolae-dependent manner. We reveal that GSK3beta is a novel modulator in PACAP signalling. PACAP induces phosphorylation of serine 9 in GSK3beta, which is inhibited by silencing Rap1. Lithium and valproate promote but wortmannin and LY294002 attenuate PACAP-induced phosphorylation of both GSK3beta and ERK1/2, whereas MEK inhibitor PD98059 inhibits nerve growth factor- but not PACAP-induced phosphorylation of GSK3beta, suggesting that GSK3beta operates downstream of Rapt 1 but upstream of ERK1/2 in PACAP signalling. Inhibition or stimulation of GSK3beta results in a 2-fold increase and 6-fold decrease in PACAP-induced neurite outgrowth, respectively. These results reveal an important role of caveolae in the signal transduction of PACAP and that GSK3beta is a critical regulator in PACAP-induced neuronal differentiation.