Inflammatory proteases (mast cell tryptase and trypsins) cleave protease-activated receptor 2 (PAR₂) on spinal afferent neurons and cause persistent inflammation and hyperalgesia by unknown mechanisms. We determined whether transient receptor potential vanilloid receptor 1 (TRPV1), a cation channel activated by capsaicin, protons, and noxious heat, mediates PAR₂-induced hyperalgesia. PAR₂ was coexpressed with TRPV1 in small- to medium-diameter neurons of the dorsal root ganglia (DRG), as determined by immunofluorescence. PAR₂ agonists increased intracellular [Ca²⁺] ([Ca²⁺]_i) in these neurons in culture, and PAR₂-responsive neurons also responded to the TRPV1 agonist capsaicin, confirming coexpression of PAR₂ and TRPV1. PAR₂ agonists potentiated capsaicin-induced increases in [Ca²⁺]_i in TRPV1-transfected human embryonic kidney (HEK) cells and DRG neurons and potentiated capsaicin-induced currents in DRG neurons. Inhibitors of phospholipase C and protein kinase C (PKC) suppressed PAR₂-induced sensitization of TRPV1-mediated changes in [Ca²⁺]_i and TRPV1 currents. Activation of PAR₂ or PKC induced phosphorylation of TRPV1 in HEK cells, suggesting a direct regulation of the channel. Intraplantar injection of a PAR₂ agonist caused persistent thermal hyperalgesia that was prevented by antagonism or deletion of TRPV1. Coinjection of nonhyperalgesic doses of PAR₂ agonist and capsaicin induced hyperalgesia that was inhibited by deletion of TRPV1 or antagonism of PKC. PAR₂ activation also potentiated capsaicin-induced release of substance P and calcitonin gene-related peptide from superfused segments of the dorsal horn of the spinal cord, where they mediate hyperalgesia. We have identified a novel mechanism by which proteases that activate PAR₂ sensitize TRPV1 through PKC. Antagonism of PAR₂, TRPV1, or PKC may abrogate protease-induced thermal hyperalgesia.