In addition to its role as a CNS neurotransmitter, glutamate has been shown recently to be an important component of the peripheral inflammation response. We demonstrated previously that the group I metabotropic glutamate receptors (mGluRs) mGlu1 and mGlu5 are expressed in the peripheral terminals of sensory neurons and that activation of group I mGluRs in the skin increases thermal sensitivity. In the present study, we provide evidence suggesting that group I mGluRs increase thermal sensitivity by enhancing vanilloid (capsaicin) receptor function. We show that mGlu5 potentiates capsaicin responses in mouse sensory neurons by the phospholipase C pathway but not by activation of protein kinase C. Rather, the effects are mediated by the metabolism of diacylglycerol and the production of prostaglandins via the cyclooxygenase pathway, leading to activation of the cAMP-dependent protein kinase subsequent to prostanoid receptor activation. Behavioral thermal sensitization in mice induced by intraplantar injection of mGlu1/5 agonists was also blocked by inhibitors of protein kinase A and cyclooxygenase, suggesting that a similar signaling pathway operates in vivo. These results demonstrate a novel signaling pathway in sensory neurons and provide a plausible mechanism for the enhancement of thermal sensitivity that occurs with inflammation and after activation of mGluRs on peripheral sensory neuron terminals.