Pituitary adenylate cyclase activating polypeptide (PACAP) is a pleiotropic neuropeptide with a wide range of effects in the central and peripheral nervous systems. PACAP has well-documented neurotrophic and neuroprotective actions in both in vitro and in vivo models of different neuronal injuries. The aim of the present study was to investigate the possible neuroprotective effect of PACAP in retinal degeneration induced by monosodium-glutamate (MSG) in neonatal rats. Preceding the MSG treatment, PACAP (1 or 100 pmol/5 μl) was injected unilaterally into the vitreous body on postnatal days 1, 5 and 9. Immediately after the PACAP treatment, pups were treated with 2 mg/g body weight MSG subcutaneously. At 3 weeks of age, rats were sacrificed and retinas were removed and processed for histological examination. Our results show that MSG treatment caused severe degeneration, primarily of the inner retinal layers. The thickness of the entire retina was only approximately half of that of the normal retinas, and the inner nuclear layer seemed to be fused with the ganglionic cell layer, with no discernible inner plexiform layer. Retinas of animals treated with 1 pmol PACAP showed a similar degree of degeneration. However, retinas of rats treated with 100 pmol PACAP showed significantly less damage, with clearly distinguishable inner retinal layers. In summary, our present study shows that local PACAP treatment could attenuate the retinal degeneration induced by the excitotoxic effects of glutamate.