The two amino acids GABA and glycine mediate fast inhibitory neurotransmission in different CNS areas and serve pivotal roles in the spinal sensory processing. Under healthy conditions, they limit the excitability of spinal terminals of primary sensory nerve fibers and of intrinsic dorsal horn neurons through pre- and postsynaptic mechanisms, and thereby facilitate the spatial and temporal discrimination of sensory stimuli. Removal of fast inhibition not only reduces the fidelity of normal sensory processing but also provokes symptoms very much reminiscent of pathological and chronic pain syndromes. This review summarizes our knowledge of the molecular bases of spinal inhibitory neurotransmission and its organization in dorsal horn sensory circuits. Particular emphasis is placed on the role and mechanisms of spinal inhibitory malfunction in inflammatory and neuropathic chronic pain syndromes.