There is mounting evidence that the vanilloid (capsaicin) receptor; transient receptor potential channel, vanilloid subfamily member 1 (TRPV1), is subjected to multiple interacting levels of control. The first level is by reversible phosphorylation catalyzed by intrinsic kinases (e.g. protein kinase A and C) and phosphatases (e.g. calcineurin), which plays a pivotal role in receptor sensitization vs. tachyphylaxis. In addition, this mechanism links TRPV1 to intracellular signaling by various important endogenous as well as exogenous substances such as bradykinin, ethanol, nicotin and insulin. It is not clear, however, whether phosphorylation per se is sufficient to liberate TRPV1 under the inhibitory control of phosphatydylinositol‐4,5‐bisphosphate. The second level of control is by forming TRPV1 heteromers and their association with putative regulatory proteins. The next level of regulation is by subcellular compartmentalization. The membrane form of TRPV1 functions as a nonselective cation channel. On the endoplasmic reticulum, TRPV1 is present in two differentially regulated forms, one of which is inositol triphosphate‐dependent whereas the other is not. These three TRPV1 compartments provide a versatile regulation of intracellular Ca²⁺ levels. Last, there is a complex and poorly understood regulation of TRPV1 activity via control of gene expression. Factors that downregulate TRPV1 expression include vanilloid treatment and growth factor (notably, nerve growth factor) deprivation. By contrast, TRPV1 appears to be upregulated during inflammatory conditions. Interestingly, following experimental nerve injury and in animal models of diabetic neuropathy TRPV1 is present on neurons that do not normally express TRPV1. Combined, these findings imply an important role for aberrant TRPV1 expression in the development of neuropathic pain and hyperalgesia. In humans, disease‐related changes in TRPV1 expression have already been described (e.g. inflammatory bowel disease and irritable bowel syndrome). The mechanisms that regulate TRPV1 gene expression under pathological conditions are unknown but a better understanding of these pathways has obvious implications for rational drug development.