Peripheral nerve injury induces functional and structural remodeling of neural circuits along the somatosensory pathways, forming the basis for somatotopic reorganization and ectopic sensations, such as referred phantom pain. However, the mechanisms underlying that remodeling remain largely unknown. Whisker sensory nerve injury drives functional remodeling in the somatosensory thalamus: the number of afferent inputs to each thalamic neuron increases from one to many. Here, we report that extrasynaptic γ-aminobutyric acid-type A receptor (GABAR)-mediated tonic inhibition is necessary for that remodeling. Extrasynaptic GABAR currents were potentiated rapidly after nerve injury in advance of remodeling. Pharmacological activation of the thalamic extrasynaptic GABARs in intact mice induced similar remodeling. Notably, conditional deletion of extrasynaptic GABARs in the thalamus rescued both the injury-induced remodeling and the ectopic mechanical hypersensitivity. Together, our results reveal a molecular basis for injury-induced remodeling of neural circuits and may provide a new pharmacological target for referred phantom sensations after peripheral nerve injury.