Sensory input from the periphery to the CNS is critically dependent on the strength of synaptic transmission at the first sensory synapse formed between primary afferent dorsal root ganglion (DRG) and superficial dorsal horn (DH) neurons of the spinal cord. Transient Receptor Potential Vanilloid 1 (TRPV1) expressed on a subset of sensory neurons plays an important role in chronic inflammatory thermal nociception. Activation of protein kinase C (PKC) sensitizes TRPV1, which may contribute to the pathophysiology of chronic pain conditions. In this study, we have examined the modulation of TRPV1-mediated enhancement of excitatory synaptic transmission in response to PKC activation. Miniature excitatory postsynaptic currents (mEPSCs) from embryonic rat DRG-DH neuronal co-cultures were recorded by patch clamping DH neurons. Capsaicin potently increased the frequency but not the amplitude of mEPSCs in a calcium-dependent manner, suggesting TRPV1-mediated glutamate release from pre-synaptic terminals of sensory neurons. Continued or repeated applications of capsaicin reduced the frequency of mEPSCs over time. PKC activator, phorbol 12, 13 dibutyrate (PDBu) alone increased mEPSC events to a certain extent in a reversible manner but capsaicin further synergistically enhanced the frequency of mEPSCs. PKC inhibitor, bisindolylmaleimide (BIM) abolished PDBu-mediated potentiation of TRPV1-dependent increases in mEPSC frequency suggesting modulation of TRPV1 by PKC-induced phosphorylation. In addition, at normal body temperatures (37°C) PKC-mediated enhancement of mEPSC frequency is significantly decreased by a specific TRPV1 antagonist, suggesting a physiological role of TRPV1 at the central terminals. Furthermore, bradykinin (BK) significantly potentiated TRPV1-modulated synaptic responses by activating the PLC- PKC pathway. Our results indicate that TRPV1 activation can modulate excitatory synaptic transmission at the first sensory synapse and its effects can further be augmented by activation of PKC. Increased gain of sensory input by TRPV1-induced enhancement of glutamate release and its potentiation by various inflammatory mediators may contribute to persistent pain conditions. Selective targeting of TRPV1 expressed on the central terminals of sensory neurons may serve as a strategy to alleviate chronic intractable pain conditons.