After injury, mammalian spinal cords develop scars to seal off the damaged area and prevent further injury. However, excessive scarring can hinder neural regeneration and functional recovery. These competing actions underscore the importance of developing therapeutic strategies to dynamically modulate the extent of scar formation. Previous research on scar formation has primarily focused on the role of astrocytes, but recent evidence suggests that ependymal cells also participate. Ependymal cells normally form the epithelial layer encasing the central canal, but they undergo massive proliferation and differentiation into astroglia following certain types of injury, becoming a core component of scars. However, the mechanisms regulating ependymal proliferation in vivo in both healthy and injured conditions remain unclear. Here, we uncover an intercellular kappa (κ) opioid signaling pathway that controls endogenous ependymal proliferation. Specifically, we detect expression of the κ opioid receptor, OPRK1, in a functionally under-characterized cell type called cerebrospinal fluid-contacting neurons (CSF-cNs). We also discover a neighboring cell population that express the cognate ligand, prodynorphin (PDYN). Importantly, OPRK1 activation excites CSF-cNs, and systemic administration of a κ antagonist enhances ependymal proliferation in uninjured spinal cords in a CSF-cN-dependent manner. Moreover, injecting a κ agonist reduces the proliferation induced by dorsal hemisection. Altogether, our data suggest a regulatory mechanism whereby PDYN+ cells tonically release κ opioids to stimulate CSF-cNs, which in turn suppress ependymal proliferation. This endogenous pathway provides a mechanistic basis for the potential use of κ opiates in modulating scar formation and treating spinal cord injuries.