The PAC1 receptor and tissue transglutaminase (TG2) play important roles in neurite outgrowth and modulation of neuronal cell survival. In this study, we investigated the regulation of TG2 activity by the PAC1 receptor in retinoic acid-induced differentiating N2a neuroblastoma cells. TG2 transamidase activity was determined using an amine incorporation and a peptide cross linking assay. In situ TG2 activity was assessed by visualising the incorporation of biotin-X-cadaverine using confocal microscopy. TG2 phosphorylation was monitored via immunoprecipitation and Western blotting. The role of TG2 in PAC1 receptor-induced cytoprotection and neurite outgrowth was investigated by monitoring hypoxia-induced cell death and appearance of axonal-like processes, respectively. The amine incorporation and protein crosslinking activity of TG2 increased in a time and concentration-dependent manner following stimulation with pituitary adenylate cyclase-activating polypeptide-27 (PACAP-27). PACAP-27 mediated increases in TG2 activity were abolished by the TG2 inhibitors Z-DON and R283 and by pharmacological inhibition of protein kinase A (KT 5720 and Rp-cAMPs), protein kinase C (Ro 31–8220), MEK1/2 (PD 98059), and removal of extracellular Ca2+. Fluorescence microscopy demonstrated PACAP-27 induced in situ TG2 activity. TG2 inhibition blocked PACAP-27 induced attenuation of hypoxia-induced cell death and outgrowth of axon-like processes. TG2 activation and cytoprotection were also observed in human SH-SY5Y cells. Together, these results demonstrate that TG2 activity was stimulated downstream of the PAC1 receptor via a multi protein kinase dependent pathway. Furthermore, PAC1 receptor-induced cytoprotection and neurite outgrowth are dependent upon TG2. These results highlight the importance of TG2 in the cellular functions of the PAC1 receptor.