Pituitary adenylate cyclase-activating polypeptide (PACAP) is a member of the vasointestinal polypeptide gene family for which neurotrophic activity has been postulated. PACAP mRNA is expressed in the developing and adult hippocampus, which is the principal target region of septal cholinergic neurons. We therefore studied the effects of PACAP on septal cholinergic neurons. In primary cultures from septum of embryonic and postnatal rats, PACAP increased the number of neurons immunohistochemically stained for the low-affinity nerve growth factor (NGF) receptor p75 and for the enzyme choline acetyltransferase (ChAT). PACAP also caused a corresponding increase in ChAT activity. In comparison, NGF had a greater effect than PACAP on the number of p75- and ChAT-positive neurons in these cultures. In vivo, following fimbria fornix transection, the number of immunohistochemically stained septal cholinergic neurons fell significantly to 18% in rats given continuous intracerebroventricular infusion of vehicle, whereas in rats given NGF the number of these neurons did not differ significantly from unoperated controls. In PACAP-treated rats the number was 48% of unoperated values, which represented a significant increase compared with vehicle-treated rats and a significant decrease compared with NGF-treated rats or unoperated controls. Double-staining experiments revealed that most ChAT-positive neurons in rat medial septum also express PACAP receptor 1. Together the results show that PACAP promotes the survival of septal cholinergic neurons in vitro, and after injury in vivo, suggesting that PACAP acts as a neurotrophic factor influencing the development and maintenance of these neurons.