Transient Receptor Potential Vanilloid 1 (TRPV1) is a polymodal, Ca
2ϩ-permeable cation channel crucial to regulation of nociceptor responsiveness. Sensitization of TRPV1 by G-protein coupled receptor (GPCR) agonists to its endogenous activators, such as low pH and noxious heat, is a key factor in hyperalgesia during tissue injury as well as pathological pain syndromes. Conversely, chronic pharmacological activation of TRPV1 by capsaicin leads to calcium influx-induced adaptation of the channel. Paradoxically, both conditions entail activation of phospholipase C (PLC) enzymes, which hydrolyze phosphoinositides. We found that in sensory neurons PLC activation by bradykinin led to a moderate decrease in phosphatidylinositol-4,5-bisphosphate (PI(4,5)P 2 ), but no sustained change in the levels of its precursor PI(4)P. Preventing this selective decrease in PI(4,5)P 2 inhibited TRPV1 sensitization, while selectively decreasing PI(4,5)P 2 independently of PLC potentiated the sensitizing effect of protein kinase C (PKC) on the channel, thereby inducing increased TRPV1 responsiveness. Maximal pharmacological TRPV1 stimulation led to a robust decrease of both PI(4,5)P 2 and its precursor PI(4)P in sensory neurons. Attenuating the decrease of either lipid significantly reduced desensitization, and simultaneous reduction of PI(4,5)P 2 and PI(4)P independently of PLC inhibited TRPV1. We found that, on the mRNA level, the dominant highly Ca 2ϩ -sensitive PLC isoform in dorsal root ganglia is PLC␦4. Capsaicin-induced desensitization of TRPV1 currents was significantly reduced, whereas capsaicininduced nerve impulses in the skin-nerve preparation increased in mice lacking this isoform. We propose a comprehensive model in which differential changes in phosphoinositide levels mediated by distinct PLC isoforms result in opposing changes in TRPV1 activity.