Sensitization of the pain-transducing ion channel TRPV1 underlies thermal hyperalgesia by proalgesic agents such as nerve growth factor (NGF). The currently accepted model is that the NGF-mediated increase in TRPV1 function during hyperalgesia utilizes activation of phospholipase C (PLC) to cleave PIP2, proposed to tonically inhibit TRPV1. In this study, we tested the PLC model and found two lines of evidence that directly challenge its validity: (1) polylysine, a cationic phosphoinositide sequestering agent, inhibited TRPV1 instead of potentiating it, and (2) direct application of PIP2 to inside-out excised patches dramatically potentiated TRPV1. Furthermore, we show four types of experiments indicating that PI3K is physically and functionally coupled to TRPV1: (1) the p85β subunit of PI3K interacted with the N-terminal region of TRPV1 in yeast 2-hybrid experiments, (2) PI3K-p85β coimmunoprecipitated with TRPV1 from both HEK293 cells and dorsal root ganglia (DRG) neurons, (3) TRPV1 interacted with recombinant PI3K-p85 in vitro, and (4) wortmannin, a specific inhibitor of PI3K, completely abolished NGF-mediated sensitization in acutely dissociated DRG neurons. Finally, simultaneous electrophysiological and total internal reflection fluorescence (TIRF) microscopy recordings demonstrate that NGF increased the number of channels in the plasma membrane. We propose a new model for NGF-mediated hyperalgesia in which physical coupling of TRPV1 and PI3K in a signal transduction complex facilitates trafficking of TRPV1 to the plasma membrane.