Chronic pain is one of the most significant and costly medical problems throughout the world. Recent evidence has confirmed the hippocampus as an active modulator of pain chronicity but the underlying mechanisms remain poorly defined. By means of in vivo electrophysiology together with chemogenetic and optogenetic manipulations in freely behaving mice, we identified a neural ensemble in the ventral hippocampal CA1 (vCA1) that showed inhibitory responses to noxious external stimuli, but not to innocuous stimuli. Following peripheral inflammation, this neuronal ensemble became responsive to innocuous stimuli and causally contributed to sensory hypersensitivity in inflammatory animals. Mimicking this inhibition of vCA1 neurons using chemogenetics in naïve mice induced chronic pain-like behavioral changes, whereas activating these vCA1 neurons in mice with chronic peripheral inflammation resulted in a striking reduction of pain-related behaviors. Pathway-specific manipulation of vCA1 projections to the basolateral amygdala (BLA) and infralimbic cortex (IL) showed that these pathways were differentially involved in pain modulation at different temporal stages of chronic inflammatory pain. These results confirm a crucial role of the ventral hippocampus and its circuits in modulating the development of chronic pain in mice.