Complete understanding of how neuropeptides operate as neuromodulators and neurohormones requires integration of knowledge obtained at different levels of biology, including molecular, biochemical, physiological and whole organism studies. Major advances have recently been made in the understanding of the molecular basis of neuropeptide action in invertebrates by analysis of data generated from sequencing the genomes of several insect species, especially that of Drosophila melanogaster. This approach has quickly led to the identification of genes encoding: (1) novel neuropeptide sequences, (2) neuropeptide receptors and (3) peptidases that might be responsible for the processing and inactivation of neuropeptides. In this article, we review our current knowledge of the biosynthesis, receptor interaction and metabolic inactivation of the arthropod neuropeptide, proctolin, and how the analysis and exploitation of genome sequencing projects has provided new insights.