Ciliary neurotrophic factor and bone morphogenetic proteins induce astrocytogenesis in the developing rat brain by stimulating STAT- and Smad-dependent signaling, respectively. We previously found that stimulation of the cAMP-dependent signaling pathway also triggers differentiation of cerebral cortical precursor cells into astrocytes, providing an additional mechanism to promote astrocyte differentiation. In this study, we show that pituitary adenylate cyclase-activating polypeptide (PACAP), but not the related vasoactive intestinal peptide, induces astrocyte differentiation of cortical precursor cells, even after a transient exposure. Cortical precursors were found to express predominantly the short isoform of the PACAP-specific PAC1 receptor, which couples to adenylate cyclase. Consistent with this notion, we determined that exposure of cortical precursors to PACAP resulted in a dose-dependent increase in cAMP production. Pretreatment of cells with the cAMP antagonist Rp-cAMPS prevented astrocyte differentiation. Thus, PACAP acts as an extracellular signal to trigger cortical precursor cell differentiation into astrocytes via stimulation of intracellular cAMP production.