Tumor necrosis factor-α (TNFα) is a proinflammatory cytokine that contributes to inflammatory and neuropathic pain. The mechanism by which TNFα modulates synaptic transmission in mouse substantia gelatinosa was studied using whole-cell patch clamp and immunohistochemistry. TNFα was confirmed to significantly increase the frequency of spontaneous EPSCs (sEPSCs) in spinal neurons and to also produce a robust decrease in the frequency of spontaneous IPSCs (sIPSCs). The enhancement of excitatory synaptic transmission by TNFα is in fact observed to be dependent on the suppression of sIPSCs, or disinhibition, in that blockade of inhibitory synaptic transmission prevents the effect of TNFα on sEPSCs but not vice versa. TNFα-induced inhibition of sIPSCs was blocked by neutralizing antibodies to TNF receptor 1 (TNFR1) but not to TNFR2 and was abolished by the p38 mitogen-activated protein kinase inhibitor SB202190 [4-(4-fluorophenyl)-2-(4-hydroxyphenyl)-5-(4-pyridyl)1H-imidazole]. TNFα rapidly inhibited spontaneous action potentials in GABAergic neurons identified in transgenic mice expressing enhanced green fluorescent protein controlled by the GAD67 promoter. This inhibitory effect was also blocked by intracellular delivery of SB202190 to the targeted cells. The inhibition of spontaneous activity in GABAergic neurons by TNFα is shown as mediated by a reduction in the hyperpolarization-activated cation current (I_h). These results suggest a novel TNFα–TNFR1–p38 pathway in spinal GABAergic neurons that may contribute to the development of neuropathic and inflammatory pain by TNFα.