The vasoactive intestinal peptide (VIP) and pituitary adenylate cyclase-activating polypeptide (PACAP) are two neuropeptides belonging to the VIP/secretin/glucagon family of peptides. VIP/PACAP are present and released from both innervation and immune cells, particularly Th2 cells, and exert a wide spectrum of immunological functions controlling the homeostasis of immune system through different receptors expressed in various immunocompetent cells. VIP/PACAP have a general anti-inflammatory effect, both in innate and adaptive immunity. In innate immunity, VIP/PACAP inhibit the production of pro-inflammatory cytokines and chemokines from macrophages, microglia and dendritic cells. In addition, VIP/PACAP reduce the expression of costimulatory molecules (particularly CD80 and CD86) on the antigen-presenting cells, and therefore reduce stimulation of antigen-specific CD4+ T cells. In terms of adaptive immunity, VIP/PACAP promote Th2-type responses, and reduce the pro-inflammatory Th1-type responses. Several of the molecular mechanisms involved in the inhibition of cytokine and chemokine expression, and in the preferential development and/or survival of Th2 effectors, are perfectly known. Therefore, VIP/PACAP and analogues have been recently proposed as very promising candidates, alternative to other existing treatments, for treating acute and chronic inflammatory and autoimmune diseases, such as septic shock, rheumatoid arthritis, multiple sclerosis, Parkinsons disease, Crohn disease, or autoimmune diabetes. The aim of this review is firstly to update our knowledge of the cellular and molecular events relevant to VIP function on the immune system; and secondly to gather together recent data that support its role as a type 2 cytokine. Recognition of the central functions VIP plays in cellular processes is focusing our attention on this “very important peptide” as an exciting new candidate for therapeutic intervention and drug development.