Adult dentate neurogenesis is important for certain types of hippocampal-dependent learning and also appears to be important for the maintenance of normal mood and the behavioural effects of antidepressants. Neuropeptide Y (NPY), a peptide neurotransmitter released by interneurons in the dentate gyrus, has important effects on mood, anxiety-related behaviour and learning and memory. We report that adult NPY receptor knock-out mice have significantly reduced cell proliferation and significantly fewer immature doublecortin-positive neurons in the dentate gyrus. We also show that the neuroproliferative effect of NPY is dentate specific, is Y1-receptor mediated and involves extracellular signal-regulated kinase (ERK)1/2 activation. NPY did not exhibit any effect on cell survival in vitro but constitutive loss of the Y1 receptor in vivo resulted in greater survival of newly generated neurons and an unchanged total number of dentate granule cells. These results show that NPY stimulates neuronal precursor proliferation in the dentate gyrus and suggest that NPY-releasing interneurons may modulate dentate neurogenesis.