Neuropeptides improve wound healing, but little is known about how they affect stem cells (SC), committed progenitors (CP), and relevant signaling pathways to increase proliferation. Mice with Capsaicin-induced decreased sensory innervation (DSI) were treated with Substance P (SP). 6mm wounds were analyzed at 4 days post- wounding (in the most proliferative phase of healing). Keratinocyte division analysis was studied using Numb and keratin 1 expression. In Capsaicin vs. vehicle treated mice, wound healing was delayed, (24.8±0.3 days vs. 14.5±0.3 days (n= 8,P<.0001), as previously shown. SP vs. vehicle improved wound healing in mice with DSI (18.8±0.3d vs. 24.0±0.3d, n=8, P<.0001). In vitro, division fate of normal keratinocytes obtained post-wounding showed increases in both asymmetric SC self-renewal (ASR) 3.3±0.11 vs 2.1±0.13 (P=0.01) and symmetric self-renewal (SSR) 0.7±0.07 vs 0.3 ±0.07 (P=0.02), with no change in the proportions of ASR/SSR and with no evidence of a CP response. The wound healing response for epidermis with DSI vs. normal epidermis was associated with a decrease in all division fates: ASR 1.4±0.9 vs. 2.3±0.12 (P=0.0002), SSR 0.45±0.06 vs. 0.68±0.14 (P=0.15), symmetric differentiation (SD): 4.7±0.16 vs. 6.3±0.6 (P=0.03). SP treatment of wounds with DSI was associated with an increase in ASR and SD, with no detected change in SSR (ASR: 2.11±0.02 vs. 1.35±0.12, P= 0.0007, SD: 6.68±0.22 vs. 4.96±0.26, P=0.0023, n=4). Thus, DSI results in decreased proliferation of SCs and CPs. Decreased CP proliferation may be a direct effect of DSI on CPs, or may be secondary to a reduction in their numbers due to the decreased ASR. Notably, SP effectively reversed both the delay in wound healing and decrease in ASR caused by DSI, indicating that SP is a key neuropeptide in neuropeptide-induced proliferation.