Opioid-induced hyperalgesia (OIH) is most broadly defined as a state of nociceptive sensitization caused by exposure to opioids. The state is characterized by a paradoxical response whereby a patient receiving opioids for the treatment of pain may actually become more sensitive to certain painful stimuli. The type of pain experienced may or may not be different from the original underlying painful condition. Although the precise molecular mechanism is not yet understood, it is generally thought to result from neuroplastic changes in the peripheral and central nervous systems that lead to sensitization of pronociceptive pathways. OIH seems to be a distinct, definable, and characteristic phenomenon that may explain loss of opioid efficacy in some cases. Clinicians should suspect expression of OIH when opioid treatment effect seems to wane in the absence of disease progression, particularly if found in the context of unexplained pain reports or diffuse allodynia unassociated with the pain as previously observed. This review highlights the important mechanistic underpinnings and clinical ramifications of OIH and discusses future research directions and the latest clinical evidence for modulation of this potentially troublesome clinical phenomenon.