The neuropeptide pituitary adenylate cyclase–activating polypeptide (PACAP) is ubiquitously distributed in both the central and peripheral nervous systems and exerts a variety of effects. PACAP is a neuropeptide in pancreatic islets, where it has been suggested as a parasympathetic and sensory neurotransmitter. PACAP stimulates insulin secretion in a glucose-dependent manner, by an effect executed mainly through augmenting the formation of cAMP and stimulating the uptake of calcium. Accumulating evidence in animal studies points to a physiological importance of PACAP in the regulation of the insulin response to feeding. This review summarizes the current knowledge of islet actions and mechanisms and the function of PACAP.