The tumor suppressor gene Lot1 is highly expressed during brain development. During cerebellar development, Lot1 is expressed by proliferating granule cells with a time course matching the expression of the pituitary adenylate cyclase-activating polypeptide (PACAP) receptor, a neuropeptide receptor that plays an important role in the regulation of granule cell proliferation/survival. Although it has become clear that Lot1 is a negative regulator of cell division in tumor cells, its role in neuronal proliferation is not understood. We previously demonstrated that in cerebellar granule cells Lot1 expression is regulated by the PACAP/cAMP system. The aim of this study was to investigate the role played by Lot1 in neuron proliferation/survival and to identify the molecular mechanisms underlying its actions. Using a Lot1-inducible expression system, we found that in PC12 cells Lot1 negatively regulates proliferation and favors differentiation by up-regulating the expression of the PACAP receptor. In cerebellar granule cells in culture, an increase in Lot1 expression was paralleled by inhibition of proliferation and up-regulation of the PACAP receptor, which in turn positively regulated Lot1 expression. Silencing of Lot1 leads to an increase in granule cell proliferation and a reduction in survival. Confirming the in vitro results, in vivo experiments showed that PACAP induced an increase in Lot1 expression that was paralleled by inhibition of cerebellar granule cell proliferation. These data show that Lot1 is a key element of the PACAP/cAMP pathway that negatively regulates neuronal precursor proliferation. The existence of a PACAP receptor/Lot1-positive feedback loop may powerfully regulate neural proliferation during critical phases of cerebellar development.