The enteric nervous system (ENS), referred to as the “second brain,” comprises a vast number of neurons that form an elegant network throughout the gastrointestinal tract. Neuropeptides produced by the ENS play a crucial role in the regulation of inflammatory processes via cross talk with the enteric immune system. In addition, neuropeptides have paracrine effects on epithelial secretion, thus regulating epithelial barrier functions and thereby susceptibility to inflammation. Ultimately the inflammatory response damages the enteric neurons themselves, resulting in deregulations in circuitry and gut motility. In this review, we have emphasized the concept of neurogenic inflammation and the interaction between the enteric immune system and enteric nervous system, focusing on neuropeptide Y (NPY) and vasoactive intestinal peptide (VIP). The alterations in the expression of NPY and VIP in inflammation and their significant roles in immunomodulation are discussed. We highlight the mechanism of action of these neuropeptides on immune cells, focusing on the key receptors as well as the intracellular signaling pathways that are activated to regulate the release of cytokines. In addition, we also examine the direct and indirect mechanisms of neuropeptide regulation of epithelial tight junctions and permeability, which are a crucial determinant of susceptibility to inflammation. Finally, we also discuss the potential of emerging neuropeptide-based therapies that utilize peptide agonists, antagonists, siRNA, oligonucleotides, and lentiviral vectors.