Pituitary adenylate cyclase-activating polypeptide (PACAP) is a hormone belonging to the glucagon superfamily of hormones. These hormones are known to play important roles in metabolism and growth. PACAP is a neuropeptide that causes accumulation of cAMP in a number of tissues and affects the secretion of other hormones, vasodilation, neural and immune functions, as well as the cell cycle. To determine whether PACAP is essential for survival and to evaluate its function(s), we have generated mice lacking the PACAP gene via homologous recombination. We found that most PACAP null mice died in the second postnatal week in a wasted state with microvesicular fat accumulation in liver, skeletal muscle, and heart. Gas chromatography-mass spectrometry showed that fatty acid β-oxidation in liver mitochondria of PACAP^−/− mice was not blocked based on the distribution of 3-hydroxy-fatty acids (C6–16) in the plasma. Instead, increased metabolic flux through the β-oxidation pathway was suggested by the presence of ketosis. Also, serum triglycerides and cholesterol were significantly higher (2- to 3-fold) in PACAP null mice than littermates. In the fed state, both serum insulin and blood glucose were normal in 5-d-old null mice compared with their littermates. In contrast, fasted PACAP null pups had a significant increase in insulin, but a decrease in blood glucose compared with littermates. Glycogen in the liver was reduced. These results suggest PACAP is a critical hormonal regulator of lipid and carbohydrate metabolism.