Injury to the peripheral nervous system (PNS) initiates a response controlled by multiple extracellular mediators, many of which contribute to the development of neuropathic pain. Schwann cells in an injured nerve demonstrate increased expression of LDL receptor-related protein-1 (LRP1), an endocytic receptor for diverse ligands and a cell survival factor. Here we report that a fragment of LRP1, in which a soluble or shed form of LRP1 with an intact α-chain (sLRP-α), was shed by Schwann cells in vitro and in the PNS after injury. Injection of purified sLRP-α into mouse sciatic nerves prior to chronic constriction injury (CCI) inhibited p38 MAPK activation (P-p38) and decreased expression of TNF-α and IL-1β locally. sLRP-α also inhibited CCI-induced spontaneous neuropathic pain and decreased inflammatory cytokine expression in the spinal dorsal horn, where neuropathic pain processing occurs. In cultures of Schwann cells, astrocytes, and microglia, sLRP-α inhibited TNF-α-induced activation of p38 MAPK and ERK/MAPK. The activity of sLRP-α did not involve TNF-α binding, but rather glial cell preconditioning, so that the subsequent response to TNF-α was inhibited. Our results show that sLRP-α is biologically active and may attenuate neuropathic pain. In the PNS, the function of LRP1 may reflect the integrated activities of the membrane-anchored and shed forms of LRP1.