Pituitary adenylate cyclase-activating polypeptide (PACAP) is a neuropeptide that occurs in several tissues, e.g., in the gut. We have studied PACAP-like immunoreactivity in the pancreas of rat and mouse, and the effects of PACAP-38 on basal and stimulated insulin and glucagon secretion in the mouse. Immunofluorescence staining demonstrated the presence of PACAP-like immunoreactivity in nerve fibers in both the rat and mouse pancreas. The nerve fibers were seen in the exocrine pancreas and surrounding the islets. Occasionally, the nerve fibers occurred within the islets. Most PACAP-positive nerve fibers innervated the intrapancreatic ganglia, although no nerve cell bodies contained PACAP-like immunoreactivity. In-vivo experiments in mice revealed that basal plasma glucagon levels were increased by PACAP-38 injected intravenously at dose levels exceeding 1.8 nmol/kg. Furthermore, PACAP-38 (7 nmol/kg) potentiated the plasma glucagon response to the cholinergic agonist carbachol (0.16 mumol/kg). This potentiation was reduced to simple addition by pretreatment with a combined alpha- and beta-adrenergic blockade by phentolamine (35 mumol/kg) and propranolol (8.5 mumol/kg). Moreover, PACAP-38 inhibited a carbachol-induced increase in the level of plasma insulin in the absence but not in the presence of adrenergic blockade. PACAP-38 increased basal plasma insulin levels and increased basal plasma glucose levels 6 min and 10 min, respectively, after injection of the peptide. We conclude that PACAP-like immunoreactivity exists in nerve fibers innervating the mouse and rat pancreas, particularly the intrapancreatic ganglia, and that PACAP-38 augments both basal and carbachol-stimulated glucagon secretion in the mouse.