Background: Low-Level Laser Therapy (LLLT) is increasingly used in the treatment of acute and chronic pain. Strong evidence from several systematic reviews and randomised controlled trials supports the efficacy of LLLT in neck pain, tendinitis and osteoarthritis and other painful conditions. Neural inhibition has been proposed as a mechanism for LLLT efficacy in pain relief. We therefore undertook a review of the literature to identify the effects of laser irradiation (LI) on electrophysiology and morphology of peripheral nerves and how such effects modulate pain. Methods: We searched computerised databases, reference lists and cosulted relevant experts. Using a priori inclusion and exclusion criteria we identified 38 relevant studies encompassing 82 experiments. Results: In human studies pulsed and continuous visible and continuous wave (cw) infrared LI slowed conduction velocity (CV) and reduced the amplitude of compound action potentials (CAPs). In animal experiments infrared LI suppressed CV and electrically and noxiously evoked action potentials including response to inflammatory mediators. Specifically, 830nm, cw, LI inhibited fast axonal flow, and decreased both mitochondrial membrane potential and ATP within axons. Conclusion: This review identifies laser-induced inhibitory effects in a diverse range of human and animal peripheral nerve models. Such effects provide a mechanism for reduction of acute pain by direct inhibition of A-delta and C fibres. In chronic pain, we propose that spinal cord changes induced by LI in the periphery can induce long-term depression of pain via central neuroplasticity resulting in clinical pain relief.