A growing number of biologically active peptides is being identified within the central nervous system (CNS). According to currently accepted criteria, several of these peptides, including VIP, can be viewed as neurotransmitters. Recent immunohistochemical and pharmacological investigations have been directed at the characterization of the position of VIP neurons in the circuitry of the cerebral cortex. From these studies some views on the possible function of VIP neurons in this CNS region are beginning to emerge. In the cerebral cortex, VIP neurons constitute a rather homogeneous population of intracortical, bipolar and radially oriented cells, which arborize locally, within cortical columns of 60-100 micron diameter. The cellular actions of VIP in the cerebral cortex include the stimulation of cAMP formation and of glycogen breakdown. A certain degree of cellular resolution of these two actions of VIP has been achieved by using purified preparations. Thus VIP stimulates cAMP formation in cerebral microvessels and in cultured astrocytes; in this latter cell type VIP also promotes glycogenolysis. Furthermore, VIP interacts synergistically with norepinephrine to stimulate cAMP formation and to inhibit the firing rate of spontaneously active identified cortical neurons. VIP neurons appear therefore to be strategically positioned to regulate the coupling between energy metabolism, blood flow and neuronal activity with great spatial selectivity and at a fine level of cortical resolution.