Activation of pain (nociceptive) fibers can sensitize neural circuits within the spinal cord, inducing an increase in excitability (central sensitization) that can foster chronic pain. The development of spinally-mediated central sensitization is regulated by descending fibers and GABAergic interneurons. In adult animals, the co-transporter KCC2 maintains a low intracellular concentration of the anion Cl−. As a result, when the GABA-A receptor is engaged, Cl− flows in the neuron which has a hyperpolarizing (inhibitory) effect. Spinal cord injury (SCI) can down-regulate KCC2 and reverse the flow of Cl−. Under these conditions, engaging the GABA-A receptor can have a depolarizing (excitatory) effect that fosters the development of nociceptive sensitization. The present paper explores how SCI alters GABA function and provides evidence that the loss of descending fibers alters pain transmission to the brain. Prior work has shown that, after SCI, administration of a GABA-A antagonist blocks the development of capsaicin-induced nociceptive sensitization, implying that GABA release plays an essential role. This excitatory effect is linked to serotonergic (5HT) fibers that descend through the dorsolateral funiculus (DLF) and impact spinal function via the 5HT-1A receptor. Supporting this, blocking the 5HT-1A receptor, or lesioning the DLF, emulated the effect of SCI. Conversely, spinal application of a 5HT-1A agonist up-regulated KCC2 and reversed the effect of bicuculline treatment. Finally, lesioning the DLF reversed how a GABA-A antagonist affects a capsaicin-induced aversion in a place conditioning task; in sham operated animals, bicuculline enhanced aversion whereas in DLF-lesioned rats biciculline had an antinociceptive effect.