Pituitary adenylate cyclase-activating polypeptide (PACAP) is a recently discovered neuropeptide which is present both in the central and peripheral nervous system of adult rats. Here we show that PACAP is also expressed by dorsal root ganglion sensory neurons of embryonic and newborn rats. To characterize the effects of PACAP on dorsal root ganglion (DRG) neurons, dissociated cultures were established and incubated in the absence or presence of this neuropeptide. The results show that PACAP increases the survival of cultured DRG neurons, and the effect was comparable to that of nerve growth factor (NGF). In DRG explants, PACAP induces the immunoreactivity for the neuropeptide calcitonin gene-related peptide (CGRP). PACAP also promoted the outgrowth of neurites in the DRG cultures. The present results show that PACAP acts as a trophic factor for DRG neurons and that it is able to modulate the expression of another neuropeptide in the ganglia. The presence of PACAP in normal DRG and after nerve lesions suggests that PACAP acts in a autocrine/paracrine manner possibly in conjunction with other neurotrophic factors such as nerve growth factor.