A recent major conceptual advance has been the recognition of the importance of immune system–neuronal interactions in the modulation of brain function, one example of which is spinal pain processing in neuropathic states. Here, we report that in peripheral nerve-injured rats, the lysosomal cysteine protease cathepsin S (CatS) is critical for the maintenance of neuropathic pain and spinal microglia activation. After injury, CatS was exclusively expressed by activated microglia in the ipsilateral dorsal horn, where expression peaked at day 7, remaining high on day 14. Intrathecal delivery of an irreversible CatS inhibitor, morpholinurea-leucine-homophenylalanine-vinyl phenyl sulfone (LHVS), was antihyperalgesic and antiallodynic in neuropathic rats and attenuated spinal microglia activation. Consistent with a pronociceptive role of endogenous CatS, spinal intrathecal delivery of rat recombinant CatS (rrCatS) induced hyperalgesia and allodynia in naïve rats and activated p38 mitogen-activated protein kinase (MAPK) in spinal cord microglia. A bioinformatics approach revealed that the transmembrane chemokine fractalkine (FKN) is a potential substrate for CatS cleavage. We show that rrCatS incubation reduced the levels of cell-associated FKN in cultured sensory neurons and that a neutralizing antibody against FKN prevented both FKN- and CatS-induced allodynia, hyperalgesia, and p38 MAPK activation. Furthermore, rrCatS induced allodynia in wild-type but not CX3CR1-knockout mice. We suggest that under conditions of increased nociception, microglial CatS is responsible for the liberation of neuronal FKN, which stimulates p38 MAPK phosphorylation in microglia, thereby activating neurons via the release of pronociceptive mediators.