The understanding of the molecular mechanisms leading to peptide action entails the identification of a core active site. The major 28-aa neuropeptide, vasoactive intestinal peptide (VIP), provides neuroprotection. A lipophilic derivative with a stearyl moiety at the N-terminal and norleucine residue replacing the Met-17 was 100-fold more potent than VIP in promoting neuronal survival, acting at femtomolar-picomolar concentration. To identify the active site in VIP, over 50 related fragments containing an N-terminal stearic acid attachment and an amidated C terminus were designed, synthesized, and tested for neuroprotective properties. Stearyl-Lys-Lys-Tyr-Leu-NH2 (derived from the C terminus of VIP and the related peptide, pituitary adenylate cyclase activating peptide) captured the neurotrophic effects offered by the entire 28-aa parent lipophilic derivative and protected against beta-amyloid toxicity in vitro. Furthermore, the 4-aa lipophilic peptide recognized VIP-binding sites and enhanced choline acetyltransferase activity as well as cognitive functions in Alzheimer's disease-related in vivo models. Biodistribution studies following intranasal administration of radiolabeled peptide demonstrated intact peptide in the brain 30 min after administration. Thus, lipophilic peptide fragments offer bioavailability and stability, providing lead compounds for drug design against neurodegenerative diseases.