We designed AM1241, a selective CB2 cannabinoid receptor agonist, and used it to test the hypothesis that CB2 receptor activation would reverse the sensory hypersensitivity observed in neuropathic pain states. AM1241 exhibits high affinity and selectivity for CB2 receptors. It also exhibits high potency in vivo. AM1241 dose-dependently reversed tactile and thermal hypersensitivity produced by ligation of the L5 and L6 spinal nerves in rats. These effects were selectively antagonized by a CB2 but not by a CB1 receptor antagonist, suggesting that they were produced by actions of AM1241 at CB2 receptors. AM1241 was also active in blocking spinal nerve ligation-induced tactile and thermal hypersensitivity in mice lacking CB1 receptors (CB1-/- mice), confirming that AM1241 reverses sensory hypersensitivity independent of actions at CB1 receptors. These findings demonstrate a mechanism leading to the inhibition of pain, one that targets receptors localized exclusively outside the CNS. Further, they suggest the potential use of CB2 receptor-selective agonists for treatment of human neuropathic pain, a condition currently without consistently effective therapies. CB2 receptor-selective agonist medications are predicted to be without the CNS side effects that limit the effectiveness of currently available medications.