Neuropeptide signaling is functionally very diverse and one and the same neuropeptide may act as a circulating neurohormone, as a locally released neuromodulator or even as a cotransmitter of classical fast-acting neurotransmitters. Thus, neuropeptides are produced by a huge variety of neuron types in different parts of the nervous system. Within the central nervous system (CNS) there are numerous types of peptidergic interneurons, some with strictly localized and patterned branching morphologies, others with widespread and diffuse arborizations. From morphology alone it is often difficult to predict the sphere of influence of a peptidergic interneuron, especially since it has been shown that neuropeptides can diffuse over tens of micrometers within neuropils, and that peptides probably are released exclusively in perisynaptic (or non-synaptic) regions. This review addresses some questions related to peptidergic signaling in the insect CNS. How diverse are the spatial relations between peptidergic neurons and their target neurons and what determines the sphere of functional influence? At one extreme there is volume transmission and at the other targeted cotransmission at synapses. Also temporal aspects of peptidergic signaling are of interest: how transient are peptidergic messages? Factors important for these spatial and temporal aspects of peptidergic signaling are proximity between release sites and cognate receptors, distribution of peptidase activity that can terminate peptide action and colocalization of other neuroactive compounds in the presynaptic peptidergic neuron (and corresponding receptors in target neurons). Other factors such as expression of different channel types, receptor inactivation mechanisms and second messenger systems probably also contribute to the diversity in temporal properties of peptide signaling.