The distribution and physiological effects of the neuropeptide galanin (GAL) have been examined in the somatosensory system. GAL is normally present in a few sensory neurons that terminate in the dorsal horn of the spinal cord and it is colocalized with substance P and calcitonin gene-related peptide. After peripheral nerve section, but not dorsal root section, the amount of GAL produced and present in sensory fibers proximal to the section is dramatically upregulated. In parallel functional studies, we could demonstrate that exogenous GAL has a complex effect on the spinal cord reflex excitability, facilitatory at low doses and inhibitory at high doses. Furthermore, GAL inhibits the effect of excitatory neuropeptides physiologically released at the peripheral and central terminals of small diameter afferents that subserve a nociceptive function. After axotomy, the inhibitory effect of GAL is increased. We conclude that GAL may have an important role in the control of nervous impulses that underlie pain states that can occur after peripheral nerve injury.