Myelin basic protein (MBP) is an auto-antigen able to induce intractable pain from innocuous mechanical stimulation (mechanical allodynia). The mechanisms provoking this algesic MBP activity remain obscure. Our present study demonstrates that membrane type 1 matrix metalloproteinase (MT1-MMP/MMP-14) releases the algesic MBP peptides from the damaged myelin, which then reciprocally enhance the expression of MT1-MMP in nerve to sustain a state of allodynia. Specifically, MT1-MMP expression and activity in rat sciatic nerve gradually increased starting at day 3 after chronic constriction injury (CCI). Inhibition of the MT1-MMP activity by intraneural injection of the function-blocking human DX2400 monoclonal antibody at day 3 post-CCI reduced mechanical allodynia and neuropathological signs of Wallerian degeneration, including axon demyelination, degeneration, edema and formation of myelin ovoids. Consistent with its role in allodynia, the MT1-MMP proteolysis of MBP generated the MBP69-86-containing epitope sequences in vitro. In agreement, the DX2400 therapy reduced the release of the MBP69-86 epitope in CCI nerve. Finally, intraneural injection of the algesic MBP69-86 and control MBP2-18 peptides differentially induced MT1-MMP and MMP-2 expression in the nerve. With these data we offer a novel, self-sustaining mechanism of persistent allodynia via the positive feedback loop between MT1-MMP and the algesic MBP peptides. Accordingly, short-term inhibition of MT1-MMP activity presents a feasible pharmacological approach to intervene in this molecular circuit and the development of neuropathic pain.