Peripheral sensory organ damage leads to compensatory cortical plasticity that supports a remarkable recovery of perceptual capabilities. A major knowledge gap is the lack of precise mechanisms that explain how this plasticity is implemented and distributed over a diverse collection of excitatory and inhibitory cortical neurons. Here, we explored these mechanisms in mouse A1. After peripheral damage, we found recovered sound-evoked activity of excitatory principal neurons (PNs) and parvalbumin (PVs) interneurons (INs), reduced activity in somatostatin-INs (SOMs), and recovered activity in vasoactive intestinal peptide-INs (VIPs). Given the sequentially organized cortical network where VIPs inhibit INs, SOMs inhibit PVs and PNs, and PVs inhibit PNs, our results suggest that PVs contribute to PN stability, SOMs allow for increased PN and PV activity, and VIPs enable the PN and PV recovery by inhibiting SOMs. These results highlight a strategic, cooperative, and cell-type-specific plasticity program that restores cortical sound processing after peripheral damage.