Pituitary adenylate cyclase-activating polypeptide (PACAP) is the latest member of the vasoactive intestinal polypeptide (VIP) family of neuropeptides present in nerve fibres in many peripheral organs. Using double immunohistochemistry, with VIP as a marker for intrinsic innervation and calcitonin-gene related peptide (CGRP) as a marker for mainly extrinsic innervation, the distribution and localization of PACAP were studied in the rat pancreas. PACAP was demonstrated in nerve fibres in all compartments of the pancreas and in a subpopulation of intrapancreatic VIP-containing ganglion cells. PACAP and VIP were co-stored in intra- and interlobular nerve fibres innervating acini, blood vessels, and in nerve fibres within the islets of Langerhans. No PACAP immunoreactivity was observed in the islet cells. Another population of PACAP-immunoreactive nerve fibres co-localized with CGRP innervated ducts, blood vessels and acini. PACAP/CGRP-positive nerve fibres were also demonstrated within the islets. Neonatal capsaicin reduced the PACAP-38 concentration by approximately 50%, and accordingly a marked reduction in PACAP/CGRP-immunoreactive nerve fibres in the exocrine and endocrine pancreas was observed. Bilateral subdiaphragmatic vagotomy caused a slight but significant decrease in the PACAP-38 concentration compared with controls. In conclusion, PACAP-immunoreactive nerve fibres in the rat pancreas seem to have dual origin: extrinsic, most probably sensory fibres co-storing CGRP; and intrinsic, constituting a subpopulation of VIP-containing nerve cell bodies and fibres innervating acinar cells and islet cells. Our data provide a morphological basis for the reported effects of PACAP in the pancreas and suggest that PACAP-containing nerves in the rat pancreas may have both efferent and sensory functions.