Clinical and experimental observations suggest that statins may be useful for treating diseases presenting with predominant neurogenic inflammation, but the mechanism(s) mediating this potential therapeutic effect are poorly understood. In this study, we tested the hypothesis that statins act directly on sensory neurons to decrease expression of proinflammatory neuropeptides that trigger neurogenic inflammation, specifically calcitonin gene-related peptide (CGRP) and substance P. Reverse transcriptase-polymerase chain reaction, radioimmunoassay, and immunocytochemistry were used to quantify CGRP and substance P expression in dorsal root ganglia (DRG) harvested from adult male rats and in primary cultures of sensory neurons derived from embryonic rat DRG. Systemic administration of statins at pharmacologically relevant doses significantly reduced CGRP and substance P levels in DRG in vivo. In cultured sensory neurons, statins blocked bone morphogenetic protein (BMP)-induced CGRP and substance P expression and decreased expression of these neuropeptides in sensory neurons pretreated with BMPs. These effects were concentration-dependent and occurred independent of effects on cell survival or axon growth. Statin inhibition of neuropeptide expression was reversed by supplementation with mevalonate and cholesterol, but not isoprenoid precursors. BMPs signal via Smad activation, and cholesterol depletion by statins inhibited Smad1 phosphorylation and nuclear translocation. These findings identify a novel action of statins involving down-regulation of proinflammatory neuropeptide expression in sensory ganglia via cholesterol depletion and decreased Smad1 activation and suggest that statins may be effective in attenuating neurogenic inflammation.