Dry eye syndrome is caused by a reduction in the volume or quality of tears. Here, we show that pituitary adenylate cyclase-activating polypeptide (PACAP)-null mice develop dry eye-like symptoms such as corneal keratinization and tear reduction. PACAP immunoreactivity is co-localized with a neuronal marker, and PACAP receptor (PAC1-R) immunoreactivity is observed in mouse infraorbital lacrimal gland acinar cells. PACAP eye drops stimulate tear secretion and increase cAMP and phosphorylated (p)-protein kinase A levels in the infraorbital lacrimal glands that could be inhibited by pre-treatment with a PAC1-R antagonist or an adenylate cyclase inhibitor. Moreover, these eye drops suppress corneal keratinization in PACAP-null mice. PACAP eye drops increase aquaporin 5 (AQP5) levels in the membrane and pAQP5 levels in the infraorbital lacrimal glands. AQP5 siRNA treatment of the infraorbital lacrimal gland attenuates PACAP-induced tear secretion. Based on these results, PACAP might be clinically useful to treat dry eye disorder.