Pituitary adenylate cyclase activating polypeptide (PACAP) is a neuropeptide with highly potent neurotrophic and neuroprotective effects. PACAP and its receptors occur in the retina and PACAP has been applied in animal models of metabolic retinal disorders to reduce structural and functional damage. Furthermore, PACAP has been implicated as a potential anti-diabetic peptide. Our aim has been to investigate, by using a complex morphological, immunochemical and molecular biological approach, whether PACAP attenuates diabetic retinopathy. Diabetes was induced in rats with a single streptozotocin injection. PACAP was injected intravitreally into one eye (100 pmol) three times during the last week of a 3-week survival period. Retinas were processed for the following procedures: routine histology, immunohistochemistry (single and double labeling, whole-mount), quantitative reverse transcription with the polymerase chain reaction and Western blotting. Cone photoreceptors and dopaminergic amacrine and ganglion cells degenerated in diabetic retinas and glial fibrillary acidic protein were upregulated in Müller glial cells. The number of cones, the length of their outer segments and the cell number in the ganglion cell layer were decreased. PACAP ameliorated these structural changes. Moreover, PACAP increased the levels of PAC1-receptor and tyrosine-hydroxylase as detected by molecular biological methods. Thus, PACAP has significant protective effects in the diabetic retina. PACAP treatment attenuates neuronal cell loss in diabetic retinopathy, the protective effects of PACAP probably being mediated through the activation of PAC1-receptor. These results suggest that PACAP has a therapeutic potential in diabetic retinopathy.