The neuropeptide PACAP, acting as a co-transmitter, increases neuronal excitability, which may enhance anxiety and arousal associated with threat conveyed by multiple sensory modalities. The distribution of neurons expressing PACAP and its receptor, PAC1, throughout the mouse nervous system was determined, in register with expression of glutamatergic and GABAergic neuronal markers, to develop a coherent chemoanatomical picture of PACAP role in brain motor responses to sensory input. A circuit role for PACAP was tested by observing activation of brain neurons after olfactory threat cue in wild-type and PACAP knockout mice. Neuronal activation and behavioral response, were blunted in PACAP knock-out mice, accompanied by sharply downregulated vesicular transporter expression in both GABAergic and glutamatergic neurons expressing PACAP and its receptor. This report signals a new perspective on the role of neuropeptide signaling in supporting excitatory and inhibitory neurotransmission in the nervous system within functionally coherent polysynaptic circuits.