How does the body regulate pain? 

Endorphins (neurotransmitters that produce cellular and behavioral effects similar to morphine) work as a chemical process to regulate and essentially inhibit pain perception.  Endorphins interact with the pain pathway at the dorsal horn, where following the slow pain pathway, neurons enter into the dorsal horn, take up substance P and continue on through the spinal cord and to the brain.  However, endorphins are simultaneously released in the dorsal horn at the same time as substance P.  With the release of endorphins, substance P release is inhibited.  Therefore, when this occurs, fewer pain impulses are sent to the brain.  Endorphins can also be released at other points in the slow pain pathway; however, they are most present in the dorsal horn.  Endorphins act as a general cushion for our bodies to fight pain.  By regulating the degree of pain felt, removal from the pain stimulus can occur and thus healing is a possibility.  Without endorphins the perception of pain would be constant and intense resulting in the inhibition of normal functioning.  Endorphins also play a distinct role in emotional aspects of pain.  By modulating level of arousal, endorphins allow organisms to adapt behavior in a given situation.  Fear, stress, anxiety and even rage can all trigger this response. 

The following diagram illustrates the pathway of Substance P, prostaglandins and nocioceptors, showing the interaction and route to the brain. 

(http://www.neuro.wustl.edu/NEUROMUSCULAR/pics/diagrams/painchemsm3.jpg)