Several lines of evidence have suggested roles for pituitary adenylate cyclase-activating polypeptide (PACAP) in the developing nervous system. Previously, we showed that mRNA for PACAP, vasoactive intestinal peptide (VIP), and their three receptor subtypes, is differentially expressed in embryonic stem (ES) cells, ES cell-derived, neural stem cell-enriched cultures, and differentiated neurons, by using the five steps of the in vitro neuronal culture model of ES cell differentiation. Here, we examined the effects of PACAP on self-renewal and cell lineage determination of neural progenitor/stem cells. PACAP inhibited the basic fibroblast growth factor-induced proliferation (self-renewal), as assessed by neurosphere formation. PACAP increased microtubule-associated protein 2-positive neurons without affecting the number of cells positive for the neural stem cell marker nestin, astrocyte marker glial fibrillary acidic protein, and oligodendrocyte marker CNPase. These results suggest that PACAP inhibits self-renewal but, instead, induces early neuronal differentiation of neural progenitor cells.