Peptides released in the spinal cord from the central terminals of nociceptors contribute to the persistent hyperalgesia that defines the clinical experience of chronic pain. Using substance P (SP) and calcitonin gene-related peptide (CGRP) as examples, this review addresses the multiple mechanisms through which peptidergic neurotransmission contributes to the development and maintenance of chronic pain. Activation of CGRP receptors on terminals of primary afferent neurons facilitates transmitter release and receptors on spinal neurons increases glutamate activation of AMPA receptors. Both effects are mediated by cAMP-dependent mechanisms. Substance P activates neurokinin receptors (3 subtypes) which couple to phospholipase C and the generation of the intracellular messengers whose downstream effects include depolarizing the membrane and facilitating the function of AMPA and NMDA receptors. Activation of neurokinin-1 receptors also increases the synthesis of prostaglandins whereas activation of neurokinin-3 receptors increases the synthesis of nitric oxide. Both products act as retrograde messengers across synapses and facilitate nociceptive signaling in the spinal cord. Whereas these cellular effects of CGRP and SP at the level of the spinal cord contribute to the development of increased synaptic strength between nociceptors and spinal neurons in the pathway for pain, the different intracellular signaling pathways also activate different transcription factors. The activated transcription factors initiate changes in the expression of genes that contribute to long-term changes in the excitability of spinal and maintain hyperalgesia.