Exogenous neuropeptide Y (NPY) reduces experimental anxiety in a wide range of animal models. The generation of an NPY-transgenic rat has provided a unique model to examine the role of endogenous NPY in control of stress and anxiety-related behaviors using paradigms previously used by pharmacological studies. Locomotor activity and baseline behavior on the elevated plus maze were normal in transgenic subjects. Two robust phenotypic traits were observed. (i) Transgenic subjects showed a markedly attenuated sensitivity to behavioral consequences of stress, in that they were insensitive to the normal anxiogenic-like effect of restraint stress on the elevated plus maze and displayed absent fear suppression of behavior in a punished drinking test. (ii) A selective impairment of spatial memory acquisition was found in the Morris water maze. Control experiments suggest these traits to be independent. These phenotypic traits were accompanied by an overexpression of prepro-NPY mRNA and NPY peptide and decreased NPY-Y1 binding within the hippocampus, a brain structure implicated both in memory processing and stress responses. Data obtained using this unique model support and extend a previously postulated anti-stress action of NPY and provide novel evidence for a role of NPY in learning and memory.