Protease-activated receptor 2 (PAR2) is functionally expressed in sensory neurons and has been implicated in the pathophysiology of inflammation and pain. PAR2 signals through the G_q/11 class of G-proteins and phospholipase C (PLC) which hydrolyses membrane phosphatidylinositol 4,5-bisphosphate (PIP₂), releases InsP₃ and can trigger InsP₃-mediated Ca²⁺ release from intracellular stores. One of the major contributors to the control of sensory neuron excitability is the M current, conducted by Kv7 channels, which are sensitive to changes in membrane PIP₂ and cytosolic Ca²⁺. We therefore sought evidence for M current modulation by PAR2 in rat dorsal root ganglion (DRG) sensory neurons. In whole cell perforated patch recordings from small DRG neurons in culture, bath application of 2f-LIGRLO-amide (10μM), a peptide agonist of PAR2 (PAR2-AP) resulted in a dramatic and sustained reduction in M current of 80.5 ± 11% (n = 23, mean ± SEM, paired t-test, p<0.0001) and a depolarisation of the resting membrane potential by 8.8 ± 2mV. Confocal microscopy of DRG neurons transfected with an optical probe for PIP₂ (PLCδ-PH-GFP) revealed that PAR2-AP stimulated PIP₂ hydrolysis and InsP₃ production (7/12 neurons). Calcium imaging of DRG neurons revealed robust rises in [Ca²⁺]_i induced by PAR2-AP (43/131), by Ca²⁺ release from intracellular stores. The majority of PAR2-AP responsive neurons (36/43) also responded to the vanilloid receptor-1 agonist capsaicin, a biomarker for nociceptive neurons. Consistently, M current inhibition by PAR2-AP could be effectively blocked by edelfosine (PLC inhibitor, 10μM, 13 ± 4% inhibition, n = 6). In addition, xestospongin C (InsP₃ receptor inhibitor, 1μM, 18 ± 9% n = 5) and intracellular BAPTA (10 mM, 34 ± 6% n = 14) also markedly reduced inhibition of M current by PAR2-AP. Buffering changes in membrane PIP₂ with short-chain diC-8 PIP₂ (100μM) in the patch pipette only modestly reduced M current inhibition (64 ± 3% inhibition, n = 4), while buffering both Ca²⁺ and PIP₂ produced inhibition comparable with that of edelfosine (24 ± 6% inhibition, n = 14). Inhibition of M current by PAR2 could be reproduced in a cell line overexpressing Kv7.2, Kv7.3 and PAR2. In behavioural studies, intraplantar injection of the selective M channel blocker, XE991 (2, 20 or 200μM), into the rat hind paw produced prominent dose-dependent nocifencive behavior similar to that induced by injection of PAR2-AP (50μM). However, co-injection of XE991 and PAR2-AP did not result in summation of pain. These data indicate a novel pathway for protease induced inflammatory pain, namely PLC-mediated inhibition of M channels located in the peripheral nerve terminals. M-channel suppression may therefore contribute to the development of ‘peripheral sensitization’ in sensory neurons.