Peripheral or central nerve injury is a frequent cause of chronic pain and the mechanisms are not fully understood. Using newly generated transgenic mice we show that progranulin overexpression in sensory neurons attenuates neuropathic pain after sciatic nerve injury and accelerates nerve healing. A yeast-2-hybrid screen revealed putative interactions of progranulin with autophagy-related proteins, ATG12 and ATG4b. This was supported by colocalization and proteomic studies showing regulations of ATG13 and ATG4b and other members of the autophagy network, lysosomal proteins and proteins involved in endocytosis. The association of progranulin with the autophagic pathway was functionally confirmed in primary sensory neurons. Autophagy and survival were impaired in progranulin-deficient neurons and improved in progranulin overexpressing neurons. Nerve injury in vivo caused an accumulation of LC3b-EGFP positive bodies in neurons of the dorsal root ganglia and nerves suggesting an impairment of autophagic flux. Overexpression of progranulin in these neurons was associated with a reduction of the stress marker ATF3, fewer protein aggregates in the injured nerve and enhanced stump healing. At the behavioral level, further inhibition of the autophagic flux by hydroxychloroquine intensified cold and heat nociception after sciatic nerve injury and offset the pain protection provided by progranulin. We infer that progranulin may assist in removal of protein waste and thereby helps to resolve neuropathic pain after nerve injury.