The heat and capsaicin receptor, TRPV1, is required for the detection of painful heat by primary afferent pain fibers (nociceptors), but the extent to which functional TRPV1 channels are expressed in the CNS is debated. Because previous evidence is based primarily on indirect physiological responses to capsaicin, here we genetically modified the Trpv1 locus to reveal, with excellent sensitivity and specificity, the distribution of TRPV1 in all neuronal and non-neuronal tissues. In contrast to reports of widespread and robust expression in the CNS, we find that neuronal TRPV1 is primarily restricted to nociceptors in primary sensory ganglia, with minimal expression in a few discrete brain regions, most notably in a contiguous band of cells within and adjacent to the caudal hypothalamus. We confirm hypothalamic expression in the mouse using several complementary approaches, including in situ hybridization, calcium imaging, and electrophysiological recordings. Additional in situ hybridization experiments in rat, monkey, and human brain demonstrate that the restricted expression of TRPV1 in the CNS is conserved across species. Outside of the CNS, we find TRPV1 expression in a subset of arteriolar smooth muscle cells within thermoregulatory tissues. Here, capsaicin increases calcium uptake and induces vasoconstriction, an effect that likely counteracts the vasodilation produced by activation of neuronal TRPV1.