The lateral parabrachial nucleus (LPBN) is known to relay noxious information to the amygdala for processing affective responses. However, it is unclear whether the LPBN actively processes neuropathic pain characterized by persistent hyperalgesia with aversive emotional responses. Here we report that neuropathic pain-like hypersensitivity induced by common peroneal nerve (CPN) ligation increases nociceptive stimulation-induced responses in glutamatergic LPBN neurons. Optogenetic activation of GABAergic LPBN neurons does not affect basal nociception, but alleviates neuropathic pain-like behavior. Optogenetic activation of glutamatergic or inhibition of GABAergic LPBN neurons induces neuropathic pain-like behavior in naïve mice. Inhibition of glutamatergic LPBN neurons alleviates both basal nociception and neuropathic pain-like hypersensitivity. Repetitive pharmacogenetic activation of glutamatergic or GABAergic LPBN neurons respectively mimics or prevents the development of CPN ligation-induced neuropathic pain-like hypersensitivity. These findings indicate that a delicate balance between excitatory and inhibitory LPBN neuronal activity governs the development and maintenance of neuropathic pain.