Once the acupuncture needle penetrates the skin, fascia and muscle, nerve endings are stimulated, sending action potentials (i.e. nerve signals) to the spinal cord, then the midbrain from where they then pass to other areas of the brain.
One of these areas is the somatosensory cortex which processes sensory information and registers the needle sensation, usually felt as a deep, dull, ache, numbness or tingly feeling. Needling should not be aversively painful - if it is the needle should be removed.
The action potentials then stimulate other parts of the brain such as the prefrontal cortex, limbic system, hippocampus, cerebellum and very importantly, the hypothalamus. The hypothalamus can be thought of as the brain's central controller, which influences other parts of the brain, the nervous system and hormonal systems.
The medical acupuncture experience, created by an experienced practitioner, has been shown to modulate different brain networks. A brain network can be thought of as different parts of the brain working together in a coordinated way to achieve a specific function.
One important network is the default mode network which regulates the body's resting state. The body must wind down from a stress state and restore itself to a resting state regularly; otherwise, persistent stress-related illness and disease may occur over time.