Inflammatory pain is thought to be mediated in part through the action of inflammatory mediators on membrane receptors of peripheral nerve terminals, however, the downstream signaling events which lead to pain are poorly understood. In this study we investigated the nociceptive pathways induced by activation of protease-activated receptor 2 (PAR-2) in damage-sensing (nociceptive) neurons from rat dorsal root ganglion (DRG). We found that activation of PAR-2 in these cells strongly inhibited M-type potassium currents (conducted by Kv7 potassium channels). Such inhibition caused depolarization of the neuronal resting membrane potential leading, ultimately, to nociception. Consistent with this mechanism, injection of the specific M channel blocker XE991 into rat paw induced nociception in a concentration-dependent manner. Injection of a PAR-2 agonist peptide also induced nociception but coinjection of XE991 and the PAR-2 agonist did not result in summation of nociception, suggesting that the action of both agents may share a similar mechanism. We also studied the signaling pathway of M current inhibition by PAR-2 using patch-clamp and fluorescence imaging of DRG neurons. These experiments revealed that the PAR-2 effect was mediated by phospholipase C (PLC). Further experiments demonstrated that M current inhibition required concurrent rises in cytosolic Ca²⁺ concentration and depletion of membrane phosphatidylinositol 4,5-bisphosphate (PIP₂). We propose that PLC- and Ca²⁺/PIP₂-mediated inhibition of M current in sensory neurons may represent one of the general mechanisms underlying pain produced by inflammatory mediators, and may therefore open up a new therapeutic window for treatment of this major clinical problem.