Among many mechanisms implicated in the development of neuropathic pain after nerve damage is a profound dysfunction of GABAergic inhibitory controls, manifested by ongoing pain, mechanical hypersensitivity, and thermal hyperalgesia. In some respects, neuropathic pain can be considered a “disease” of the nervous system, with features in common with trauma-induced seizures. Indeed, first-line management involves anticonvulsant therapy. An alternative to pharmacotherapy for neuropathic pain is an approach that reestablishes the inhibitory tone that is lost after nerve damage. To this end, we have transplanted embryonic cortical GABAergic precursor neurons into the spinal cord of nerve-injured mice. Using a combination of light and electron microscopic analyses, and also in vitro electrophysiological recordings from spinal cord slice preparations, we demonstrated remarkable integration of the transplants into the host, adult spinal cord. Most importantly, transplants produced a complete reversal of the hypersensitivity in a sciatic nerve injury model and in a paclitaxel-generated chemotherapy model of neuropathic pain. In related studies, we demonstrated that medial ganglionic eminence cell transplants are also effective in a chronic neuropathic itch model in which there is a significant loss of dorsal horn inhibitory interneurons. Most importantly, in contrast to systemic or intrathecal pharmacological therapies, adverse side effects are minimized when the inhibitory control, namely, γ-aminobutyric acid release, occurs in a spinal cord circuit. These studies suggest that therapy targeted at repairing the GABAergic dysfunction is a viable and novel alternative to the management of neuropathic pain and itch, particularly those that are or become refractory to traditional pharmacotherapy.