The pituitary adenylate cyclase-activating polypeptide (PACAP)-selective PAC1 receptor (PAC1R, ADCYAP1R1) is a member of the vasoactive intestinal peptide (VIP)/secretin/glucagon family of G protein-coupled receptors (GPCRs). PAC1R has been shown to play crucial roles in the central and peripheral nervous systems. The activation of PAC1R initiates diverse downstream signal transduction pathways, including adenylyl cyclase, phospholipase C, MEK/ERK and Akt pathways that regulate a number of physiological systems to maintain functional homeostasis. Accordingly, at times of tissue injury or insult, PACAP/PAC1R activation of these pathways can be trophic to blunt or delay apoptotic events and enhance cell survival. Enhancing PAC1R signaling under these conditions has the potential to mitigate cellular damages associated with cerebrovascular trauma (including stroke), neurodegeneration (such as Parkinson’s and Alzheimer's disease) or peripheral organ insults. Conversely, maladaptive PACAP/PAC1R signaling has been implicated in a number of disorders, including stress-related psychopathologies (i.e., depression, posttraumatic stress disorder, and related abnormalities), chronic pain and migraine, and metabolic diseases; abrogating PAC1R signaling under these pathological conditions represent opportunities for therapeutic intervention. Given the diverse PAC1R-mediated biological activities, the receptor has emerged as a relevant pharmaceutical target. In this review, we first describe the current knowledge regarding the molecular structure, dynamics, and function of PAC1R. Then, we discuss the roles of PACAP and PAC1R in the activation of a variety of signaling cascades related to the physiology and diseases of the nervous system. Lastly, we examine current drug design and development of peptides and small molecules targeting PAC1R based on a number of structure-activity relationship studies and key pharmacophore elements. At present, the rational design of PAC1R-selective peptide or small-molecule therapeutics is largely hindered by the lack of structural information regarding PAC1R activation mechanisms, the PACAP-PAC1R interface, and the core segments involved in receptor activation. Understanding the molecular basis governing the PACAP interactions with its different cognate receptors will undoubtedly provide a basis for the development and/or refinement of receptor-selective therapeutics.