Spinal cord stimulation (SCS) as an evidence-based interventional treatment has been used and approved for clinical use in a variety of pathological states including peripheral neuropathic pain; however, until now, it has not been used for the treatment of spinal cord injury- (SCI-) induced central neuropathic pain. This paper reviews the underlying mechanisms of SCS-induced analgesia and its clinical application in the management of peripheral and central neuropathic pain. Evidence from recent research publications indicates that nociceptive processing at peripheral and central sensory systems is thought to be modulated by SCS through (i) inhibition of the ascending nociceptive transmission by the release of analgesic neurotransmitters such as GABA and endocannabinoids at the spinal dorsal horn; (ii) facilitation of the descending inhibition by release of noradrenalin, dopamine, and serotonin acting on their receptors in the spinal cord; and (iii) activation of a variety of supraspinal brain areas related to pain perception and emotion. These insights into the mechanisms have resulted in the clinically approved use of SCS in peripheral neuropathic pain states like Complex Regional Pain Syndrome (CRPS) and Failed Back Surgery Syndrome (FBSS). However, the mechanisms underlying SCS-induced pain relief in central neuropathic pain are only partly understood, and more research is needed before this therapy can be implemented in SCI patients with central neuropathic pain.