Specific receptors for pituitary adenylate cyclase-activating polypeptide (PACAP), a novel peptide with neuroregulatory and neurotrophic functions, have been identified recently in different brain regions, including the hippocampus. In this study, we examined the effects of PACAP-38 on the excitatory postsynaptic field potentials (fEPSPs) evoked at the Schaffer collateral-CA1 synapses. Brief bath application of PACAP-38 (0.05 nM) induced a long-lasting facilitation of the basal transmission. Enhancement of this response was occluded in part by previous high-frequency-induced long-term potentiation (LTP). PACAP-38 did not significantly alter the paired-pulse facilitation (PPF). PACAP-38 has been shown to have a presynaptic effect on the septohippocampal cholinergic terminals, which results in an increase in basal acetylcholine (ACh) release. To assess whether the PACAP-38 enhancement of CA1 synapses was related to the activation of the cholinergic system we examined the effect of this peptide in the presence of atropine, a muscarinic receptor antagonist. The enhancement of the fEPSPs by PACAP-38 was blocked by bath application of atropine. These results show that PACAP-38 induces facilitation of hippocampal synaptic transmission through activation of the cholinergic system via the muscarinic receptors.