Experiments in rodents revealed neuropeptide S (NPS) to constitute a potential novel treatment option for anxiety diseases such as panic and post-traumatic stress disorder. However, both its cerebral target sites and the molecular underpinnings of NPS-mediated effects still remain elusive. By administration of fluorophore-conjugated NPS, we pinpointed NPS target neurons in distinct regions throughout the entire brain. We demonstrated their functional relevance in the hippocampus. In the CA1 region, NPS modulates synaptic transmission and plasticity. NPS is taken up into NPS receptor-expressing neurons by internalization of the receptor-ligand complex as we confirmed by subsequent cell culture studies. Furthermore, we tracked internalization of intranasally applied NPS at the single-neuron level and additionally demonstrate that it is delivered into the mouse brain without losing its anxiolytic properties. Finally, we show that NPS differentially modulates the expression of proteins of the glutamatergic system involved inter alia in synaptic plasticity. These results not only enlighten the path of NPS in the brain, but also establish a non-invasive method for NPS administration in mice, thus strongly encouraging translation into a novel therapeutic approach for pathological anxiety in humans.