We recently identified a novel mechanism for modulation of the phosphorylation state and function of the N-methyl-D-aspartate (NMDA) receptor via the scaffolding protein RACK1. We found that RACK1 binds both the NR2B subunit of the NMDA receptor and the nonreceptor protein-tyrosine kinase, Fyn. RACK1 inhibits Fyn phosphorylation of NR2B and decreases NMDA receptor-mediated currents in CA1 hippocampal slices (Yaka, R., Thornton, C., Vagts, A. J., Phamluong, K., Bonci, A., and Ron, D. (2002) Proc. NatL Acad. Sci. U. S. A. 99, 5710-5715). Here, we identified the signaling cascade by which RACK1 is released from the NMDA receptor complex and identified the consequences of the dissociation. We found that activation of the cAMP/protein kinase A pathway in hippocampal slices induced the release of RACK1 from NR2B and Fyn. This resulted in the induction of NR2B phosphorylation and the enhancement of NMDA receptor-mediated activity via Fyn. We identified the neuropeptide, pituitary adenylate cyclase activating polypeptide (PACAP(1-38)), as a ligand that induced phosphorylation of NR2B and enhanced NMDA receptor potentials. Finally, we found that activation of the cAMP/protein kinase A pathway induced the movement of RACK1 to the nuclear compartment in dissociated hippocampal neurons. Nuclear RACK1 in turn was found to regulate the expression of brain-derived neurotrophic factor induced by PACAP(1-38). Taken together our results suggest that activation of adenylate cyclase by PACAP(1-38) results in the release of RACK1 from the NMDA receptor and Fyn. This in turn leads to NMDA receptor phosphorylation, enhanced activity mediated by Fyn, and to the induction of brain-derived neurotrophic factor expression by RACK1.