Abnormal pain-related behaviour that accompanies peripheral nerve injury may be the result of altered spinal neuronal function. The long-term loss of inhibitory function by GABA neurons in particular may be a mechanism by which abnormal neural hyperactivity occurs, leading to exaggerated sensory processing following nerve injury. In order to assess this, changes in spinal GABA immunoreactivity at several time points following constriction nerve injury was quantified in parallel with behavioural assessments of abnormal sensory responses to noxious and innocuous stimuli. In addition, the effects of spinal adrenal medullary transplants were determined since previous findings have demonstrated alleviation of behavioural pain symptoms by such transplants. In response to unilateral sciatic nerve injury, GABAergic profiles normally found in lumbar dorsal horn laminae I–III, significantly decreased. The decrease was apparent three days following ligation, particularly on the side ipsilateral to the nerve injury. By two weeks, no GABAergic profiles could be seen, with the deficit appearing in the spinal dorsal horn both ipsilateral and contralateral to the unilateral peripheral nerve injury. Marked decreases in GABA-immunoreactive profiles persisted for at least up to five weeks post-injury, with partial restoration occurring by seven weeks. However, even at seven weeks, losses in GABA-immunoreactive profiles persisted in the dorsal horn ipsilateral to peripheral nerve injury. These findings were comparable in animals receiving control striated muscle transplants. In contrast, adrenal medullary transplants markedly reduced the loss in GABA-immunoreactive profiles at all time-points examined. In addition, GABA-immunoreactive profile levels were normalized near that of intact animals by five to seven weeks following nerve injury in animals with adrenal medullary transplants. Parallel improvements in sensory responses to innocuous and noxious stimuli were also observed in these animals. The results of this study indicate that peripheral nerve injury can result in severe losses in spinal inhibitory mechanisms, possibly leading to exaggerated sensory processes in persistent pain states. In addition, adrenal medullary transplants may provide a neuroprotective function in promoting recovery and improving long-term survival of GABAergic neurons in the spinal dorsal horn which have been damaged by excitotoxic injury.