Microglia, resident macrophages of the central nervous system (CNS), are essential to brain development, homeostasis, and disease. Microglial activation and proliferation are hallmarks of many CNS diseases including neuropathic pain. However, molecular mechanisms that govern the spinal neuro-immune axis in the setting of neuropathic pain remain incompletely understood. Here we show that genetic ablation or pharmacological blockade of transient receptor potential vanilloid type 4 (TRPV4) markedly attenuated neuropathic pain-like behaviors in a mouse model of spared nerve injury. Mechanistically, microglia-expressed TRPV4 mediated microglial activation and proliferation and promoted functional and structural plasticity of excitatory spinal neurons through releasing lipocalin-2. Our results suggest that microglial TRPV4 channels reside at the center of the neuro-immune axis in the spinal cord that transforms peripheral nerve injury into central sensitization and neuropathic pain, thereby identifying TRPV4 as a promising new target for the treatment of chronic pain.