Pituitary adenylate cyclase activating polypeptide (PACAP) is widely expressed in the central and peripheral nervous system. PACAP can initiate multiple signaling pathways through binding with three class B G-protein coupled receptors, PAC1, VPAC1 and VPAC2. Previous studies have revealed numerous biological activities of PACAP in the nervous system. PACAP acts as a neurotransmitter, neuromodulator and neurotrophic factor. Recently, its neuroprotective potential has been demonstrated in numerous in vitro and in vivo studies. Furthermore, evidence suggests that PACAP might move across the blood-brain barrier in amounts sufficient to affect the brain functions. Therefore, PACAP has been examined as a potential therapeutic method for neurodegenerative diseases. The present review summarizes the recent findings with special focus on the models of Alzheimer's disease (AD) and Parkinson's disease (PD). Based on these observations, the administered PACAP inhibits pathological processes in models of AD and PD, and alleviates clinical symptoms. It thus offers a novel therapeutic approach for the treatment of AD and PD.