Neuropathic pain arises from damage and dysfunction of the central and peripheral nervous systems, with its primary clinical manifestations including spontaneous pain, hyperalgesia, hyperpathia, and sensory abnormalities. Mongolian medicine warm acupuncture therapy, a Mongolian traditional external treatment method, is one of the Mongolian traditional therapies. It exhibits a clear analgesic effect on neuropathic pain, though its mechanism of action remains in the initial exploration stage. This article reviews recent domestic and international research findings and, at the levels of the peripheral and central nervous systems, explains the main mechanisms by which Mongolian medicine warm acupuncture therapy alleviates neuropathic pain. These mechanisms include regulating peripheral sensitization and immune-inflammatory responses, inhibiting central sensitization, modulating cell signaling pathways, suppressing spinal glial cell activation, and reducing neuronal apoptosis. The article provides theoretical references for the in-depth study and clinical application of the analgesic mechanism of Mongolian medicine warm acupuncture therapy.