Functional kainate (KA) receptors (KARs) are expressed in the spinal cord substantia gelatinosa (SG) region, and their activation has a capacity to modulate excitatory synaptic transmission at primary afferent synapses with SG neurones. In the present study, we have used gene‐targeted mice lacking KAR GluR5 and/or GluR6 subunits to determine the identity of the receptor subunits involved in the KA‐induced modulation of excitatory transmission. Our findings reveal that KARs comprising GluR5 or GluR6 subunits can either suppress or facilitate glutamatergic excitatory transmission in the SG of acutely prepared adult mouse spinal cord slices. In the absence of synaptic inhibition mediated by GABAA and glycine receptors, a biphasic effect of kainate is characteristic with facilitation apparent at a low concentration (30 nm) and depression at a higher concentration (3 μm). In addition, GluR6‐KARs, localizing pre‐ and postsynaptically, are critically involved in inhibiting transmission at both Aδ and C fibre monosynaptic pathways, whereas presynaptic GluR5‐KARs play a limited role in inhibiting the C fibre‐activated pathway. The results obtained support the hypothesis that KARs are involved in bi‐directional regulation of excitatory synaptic transmission in the spinal cord SG region, and that these actions may be of critical importance for nociception and the clinical treatment of pain.