Operative neuromodulation is the field of altering electrically or chemically the signal transmission in the nervous system by implanted devices in order to excite, inhibit or tune the activities of neurons or neural networks and produce therapeutic effects. It is a rapidly evolving biomedical and high-technology field on the cutting-edge of developments across a wide range of scientific disciplines. The authors review relevant literature on the neuromodulation procedures that are performed in the spinal cord or peripheral nerves in order to treat a considerable number of conditions such as (a) chronic pain (craniofacial, somatic, pelvic, limb, or due to failed back surgery), (b) spasticity (due to spinal trauma, multiple sclerosis, upper motor neuron disease, dystonia, cerebral palsy, cerebrovascular disease or head trauma), (c) respiratory disorders, (d) cardiovascular ischemia, (e) neuropathic bladder, and (f) bowel dysfunction of neural cause. Functional neuroprosthetics, a field of operative neuromodulation, encompasses the design, construction and implantation of artificial devices capable of generating electrical stimuli, thereby, replacing the function of damaged parts of the nervous system. The present article also reviews important literature on functional neuroprostheses, functional electrical stimulation (FES), and various emerging applications based on microsystems devices, neural engineering, neuroaugmentation, neurostimulation, and assistive technologies. The authors highlight promising lines of research such as endoneural prostheses for peripheral nerve stimulation, closed-loop systems for responsive neurostimulation or implanted microwires for microstimulation of the spinal cord to enable movements of paralyzed limbs. The above growing scientific fields, in combination with biological regenerative methods, are certainly going to enhance the practice of neuromodulation. The range of neuromodulatory procedures in the spine and peripheral nerves and the dynamics of the biomedical and technological domains which are reviewed in this article indicate that new breakthroughs are likely to improve substantially the quality of life of patients who are severely disabled by neurological disorders.