We have utilized RN46A cells, an immortalized neuronal cell line derived from E13 brainstem raphe, as a model for transplant of bioengineered serotonergic cells. RN46A cells require brain-derived neurotrophic factor (BDNF) for increased survival and serotonin (5HT) synthesis in vitro and in vivo. RN46A cells were transfected with the rat BDNF gene, and the 46A-B14 cell line was subcloned. These cells survive longer than 7 weeks after transplantation into the subarachnoid space of the lumbar spinal cord and synthesize 5HT and BDNF. Chronic constriction injury (CCI) of the sciatic nerve was used to induce chronic neuropathic pain in the affected hindpaw in rats. Transplants of 46A-B14 cells placed 1 week after CCI alleviated chronic neuropathic pain, while transplants of 46A-V1 control cells, negative for 5HT and without the BDNF gene, had no effect on the induction of thermal and tactile nociception. When endogenous cells of the dorsal horn which contain the neurotransmitter gamma-aminobutyric acid (GABA) and its synthetic enzyme glutamate decarboxylase (GAD) were immunohistochemically quantified in the lumbar spinal cord 3 days and 1-8 weeks after CCI, the number of GABA- and GAD-immunoreactive (ir) cells decreased bilateral to the nerve injury as soon as 3 days after CCI. At 1 week after CCI, the number of GABA-ir cells continued to significantly decline bilaterally, returning to near normal numbers on the side contralateral to the nerve injury by 8 weeks after the nerve injury. The number of GAD-ir cells began to increase bilaterally to the nerve injury at 1 week after CCI and continued to significantly increase in numbers over normal values by 8 weeks after the nerve injury. When examined 2 and 8 weeks after CCI plus cell transplants, the transplants of 46A-B14 cells reversed the increase in GAD-ir cell numbers and the decrease in GABA-ir cells by 1 week after transplantation, while 46A-V1 control cell transplants after CCI had no effect on the changes in numbers of GAD-ir or GABA-ir cells. Collectively, these data suggest that altered 5HT levels, and perhaps BDNF secretion, related to the transplants ameliorate chronic pain and reverse the induction and maintenance of an endogenous pain mechanism in the dorsal horn. This induction mechanism is likely dependent on altered GAD regulation and GABA synthesis, initiated by CCI.