Diabetes and obesity are characterized by hyperlipidemia and represent risk factors for premature neurological disorders. Diabetic/obese animals have impaired adult neurogenesis. We hypothesize that lipotoxicity leading to neurogenesis impairment plays a role in the development of neurological complications. If so, normalizing neurogenesis in diabetes/obesity could be therapeutically useful in counteracting neurological dysfunction. The goal of this study was to determine the potential of pituitary adenylate cyclase-activating polypeptide (PACAP) to protect adult neural stem cells (NSCs) from lipotoxicity and to study the expression of PACAP receptors in NSCs under lipotoxic conditions in vitro and in the subventricular zone in vivo. The viability of NSCs isolated from the adult mouse brain subventricular zone was assessed in the presence of a high-fat milieu, as mimicked by palmitate, which characterizes diabetic lipotoxicity. Regulation studies of PACAP receptors were performed by quantitative PCR on NSCs in vitro or on subventricular tissues isolated from obese ob/ob mice and their lean littermates. We show that palmitate impairs NSC viability by promoting lipoapoptosis. We also show that PACAP counteracts lipotoxicity via PAC-1 receptor activation. Studies on PACAP receptor expression revealed that PAC-1 and VPAC-2 are expressed by NSC in vitro and are upregulated by palmitate treatment and that PAC-1, VPAC-1, and VPAC-2 are expressed in the subventricular zone/striatum in vivo and are upregulated in ob/ob mice. The present study reveals a previously uncharacterized role of PACAP to protect NSC from lipotoxicity and suggests a potential therapeutic role for PACAP receptor agonists in the treatment of neurological complications in obesity and diabetes. © 2011 Wiley Periodicals, Inc.