In static cultures of dispersed rat pituitary cells and in the reverse hemolytic plaque assay PACAP inhibits prolactin (Prl) secretion, while in vivo application of PACAP stimulates Prl release in rats. To elucidate the mechanism of this contradictory action, we compared the in vitro effects of PACAP on Prl secretion in cultures of dispersed or reaggregated cells and in pituitary fragments. While in monolayer cultures Prl release was inhibited by PACAP, in cultures of aggregated cells and in pituitary fragments Prl release was stimulated. Dopamine (DA) inhibited Prl release in either type of culture. PACAP also stimulated interleukin 6 (IL6) release under each of the experimental conditions. We conclude that PACAP has a direct inhibitory action on lactotropes. In addition, PACAP may induce the release of a paracrine acting factor within the pituitary which stimulates Prl release and which may be IL6. In the intact pituitary tissue and in reaggregated cells this paracrine factor stimulates Prl release more potently than PACAP directly inhibits Prl secretion resulting in a net effect of enhanced hormone release. In monolayer cultures, however, the direct inhibition is dominant, because the stimulatory paracrine factor is diluted in the culture medium. Therefore we suggest that paracrine cell to cell communication is crucial for the action of PACAP on Prl release.