Pituitary adenylate cyclase–activating polypeptide (PACAP) is a naturally secreted signaling peptide and has important regulatory roles in the differentiation of the central nervous system and its absence results in disorders in femur development. PACAP has an important function in prevention of oxidative stress or mechanical stress in chondrogenesis but little is known about its function in bone regeneration. A new callus formation model was set to investigate its role in bone remodeling. Fracturing was 5 mm distal from the proximal articular surface of the tibia and the depth was 0.5 mm. Reproducibility of callus formation was investigated with CT 3, 7, and 21 days after the operation. Absence of PACAP did not alter the alkaline phosphatase (ALP) activation in PACAP KO healing process. In developing callus, the expression of collagen type I increased in wild-type (WT) and PACAP KO mice decreased to the end of healing process. Expression of the elements of BMP signaling was disturbed in the callus formation of PACAP KO mice, as bone morphogenic protein 4 (BMP4) and 6 showed an early reduction in bone regeneration. However, elevated Smad1 expression was demonstrated in PACAP KO mice. Our results indicate that PACAP KO mice show various signs of disturbed bone healing and suggest PACAP compensatory and fine tuning effects in proper bone regeneration.