The pathogenic mechanisms underlying neuropathic pain still remain largely unknown. In this study, we investigated whether spinal BDNF contributes to dorsal horn LTP induction and neuropathic pain development by activation of GluN2B-NMDA receptors via Src homology-2 domain-containing protein tyrosine phosphatase-2 (SHP2) phosphorylation in rats following spinal nerve ligation (SNL). We first demonstrated that spinal BDNF participates in the development of long-lasting hyperexcitability of dorsal horn WDR neurons (i.e. central sensitization) as well as pain allodynia in both intact and SNL rats. Second, we revealed that BDNF induces spinal LTP at C-fiber synapses via functional up-regulation of GluN2B-NMDA receptors in the spinal dorsal horn, and this BDNF-mediated LTP-like state is responsible for the occlusion of spinal LTP elicited by subsequent high-frequency electrical stimulation (HFS) of the sciatic nerve in SNL rats. Finally, we validated that BDNF-evoked SHP2 phosphorylation is required for subsequent GluN2B-NMDA receptors up-regulation and spinal LTP induction, and also for pain allodynia development. Blockade of SHP2 phosphorylation in the spinal dorsal horn using a potent SHP2 protein tyrosine phosphatase inhibitor NSC-87877, or knockdown of spinal SHP2 by intrathecal delivery of SHP2 siRNA, not only prevents BDNF-mediated GluN2B-NMDA receptors activation as well as spinal LTP induction and pain allodynia elicitation in intact rats, but also reduces the SNL-evoked GluN2B-NMDA receptors up-regulation and spinal LTP occlusion, and ultimately alleviates pain allodynia in neuropathic rats. Taken together, these results suggest that the BDNF/SHP2/GluN2B-NMDA signaling cascade plays a vital role in the development of central sensitization and neuropathic pain after peripheral nerve injury.