Neuropeptide Y (NPY) and its cognate receptors are important modulators of nociception and their expression is significantly altered following injury. In particular, previous studies have demonstrated that the Y1 subtype of NPY receptors inhibits nociceptive transmission from capsaicin-sensitive terminals in the dorsal horn of the spinal cord. The present study evaluated the function of the Y1 receptor on peripheral terminals of primary afferent neurons by testing whether peripherally administered Y1 agonists and antagonists alter capsaicin-evoked mechanical allodynia in rats and capsaicin-evoked immunoreactive calcitonin gene-related peptide (iCGRP) release from isolated superfused rat skin. Treatment with the Y1 agonist [Leu31,Pro34]-NPY (0.5, 1, or 10 nmol) significantly inhibited capsaicin-evoked mechanical allodynia in a dose-dependent manner. This effect was reversible by pretreatment with the Y1 antagonist BIBO3304 (10 nmol). The anti-allodynia produced by the Y1 agonist occurred at a peripheral site of action, because injection into the paw contralateral to the site of the capsaicin injection had no effect on paw withdrawal latencies. In isolated skin, application of [Leu31,Pro34]-NPY (300 nM) significantly inhibited capsaicin-evoked CGRP release. BIBO3304 reversed this inhibition, having itself no effect on capsaicin-evoked iCGRP release. These studies indicate that the activation of peripheral Y1 receptors produces anti-allodynia, possibly via the direct inhibition of capsaicin-sensitive fibers.