Capsaicin applied topically to human skin produces itching, pricking and burning sensations due to excitation of nociceptors. With repeated application, these positive sensory responses are followed by a prolonged period of hypalgesia that is usually referred to as desensitization, or nociceptor inactivation. Consequently, capsaicin has been recommended as a treatment for a variety of painful syndromes. The precise mechanisms that account for nociceptor desensitization and hypalgesia are unclear. The present study was performed to determine if morphological changes of intracutaneous nerve fibers contribute to desensitization and hypalgesia. Capsaicin (0.075%) was applied topically to the volar forearm four times daily for 3 weeks. At various time intervals tactile, cold, mechanical and heat pain sensations were assessed in the treated and in contralateral untreated areas. Skin blisters and skin biopsies were collected and immunostained for protein gene product (PGP) 9.5 to assess the morphology of cutaneous nerves and to quantify the number of epidermal nerve fibers (ENFs). Capsaicin resulted in reduced sensitivity to all cutaneous stimuli, particularly to noxious heat and mechanical stimuli. This hypalgesia was accompanied by degeneration of epidermal nerve fibers as evidenced by loss of PGP 9.5 immunoreactivity. As early as 3 days following capsaicin application, there was a 74% decrease in the number of nerve fibers in blister specimens. After 3 weeks of capsaicin treatment, the reduction was 79% in blisters and 82% in biopsies. Discontinuation of capsaicin was followed by reinnervation of the epidermis over a 6-week period with a return of all sensations, except cold, to normal levels. We conclude that degeneration of epidermal nerve fibers contributes to the analgesia accredited to capsaicin. Furthermore, our data demonstrate that ENFs contribute to the painful sensations evoked by noxious thermal and mechanical stimuli.