Vasoactive intestinal polypeptide receptor (VIP1R) is a class B G-protein coupled receptor (GPCR) that is widely distributed throughout the central nervous system, T-lymphocytes, and peripheral tissues of organs like lungs and liver . Critical functions of these receptors render them potential pharmacological targets for the treatment of a broad spectrum of inflammatory and neurodegenerative diseases . Here we use atomistic studies to show that phospholipids can act as potent regulators of peptide binding on to the receptor . We simulated the binding of neuropeptide pituitary adenylate cyclase-activating peptide (PACAP27) into the transmembrane bundle of the receptor . The simulations reveal two lipid binding sites on the peptidic ligand for the negatively charged phosphodiester of phospholipids in the extracellular leaflet which lower the peptide-receptor binding free energy by ~8kBT . We further simulated the effect of anionic lipids phosphatidylinositol-4,5-bisphosphate (PIP2). These lipids show much stronger interaction, lowering the peptide-receptor binding energy by an additional ~7kBT compared to POPC lipids . These findings suggest that lipids can play an active role in catalyzing peptide-receptor binding and activating vasoactive intestinal polypeptide receptors.