To study the role of pituitary adenylate cyclase-activating polypeptide (PACAP) in early brain development, we examined PACAP and its receptors for first expression and then separately knocked down the two forms of PACAP in zebrafish where development is rapid and observable. We injected morpholinos (antisense oligonucleotides) into fertilized eggs to block PACAP. Morphological changes in the brain were observed in embryos at 27 h post fertilization (hpf). Using in situ hybridization of early brain marker genes, we found that the most striking effects were an increase in pax2.1 expression in eye stalks associated with absence of either form of PACAP or an increase in eng2 and fgf8 in the midbrain-hindbrain boundary after loss of PACAP2. These marker genes are among the earliest factors in the formation of the midbrain-hindbrain boundary, an early organizing center. We suggest that PACAP is a target gene with feedback inhibition on pax2.1, eng2, or fgf8 in specific brain areas. In the hindbrain, the absence of either form of PACAP had little effect, as shown by expression of ephA4 and meis1.1. During midbrain development, our evidence suggests that PACAP1 can activate mbx. In both the diencephalon and/or forebrain, lack of PACAP1 or PACAP2 led to an increase in fgf8, again suggesting a suppressive effect of PACAP during development on these important genes that help to define cells in the forebrain. The early expression of transcripts for PACAP and its receptors by 0.5-6 hpf make both PACAP1 and PACAP2 candidates for factors that influence brain development.