The neurokinin Substance P (SP) is widely distributed in the central nervous system and has been extensively studied in various functional aspects. This review focuses on the behavioral relevance of SP. Here we show that SP can have memory-promoting, reinforcing and anxiolytic-like effects when administered systemically or into the nucleus basalis of the ventral pallidum. These effects seem to be mediated via the SP-preferring NK(1)receptor and differentially related to N- versus C-terminal fragments of the undecapeptide. Secondly, SP injection into the ventral pallidum can lead to increases of acetylcholine in frontal cortex and dopamine in nucleus accumbens, suggesting that the hypermnestic, positively reinforcing and anxiolytic effects observed upon basal forebrain injection of SP are mediated by activation of the nucleus accumbens-ventral pallidum circuitry. Furthermore, SP and certain SP-fragments may not only be considered to have beneficial behavioral effects in normal animals, but can also prevent lesion-induced functional deficits and improve the speed of recovery. This indicates that SP agonists might also have a neuroprotective capacity in parallel with recovery-promoting actions.