In 1992 the discovery of the first endogenous ligand of cannabinoid receptors, anandamide, provided conclusive support to the hypothesis that an "endogenous cannabinoid regulatory system" exists in mammalian nervous tissue. Anandamide (N-arachidonoyl-ethanolamine) was the first of a series of long-chain fatty acid derivatives, including two other polyunsaturated N-acylethanolamines and 2-arachidonoyl-glycerol, found to exert cannabimimetic properties in either central or peripheral tissues. Here we review the current knowledge on the biochemical bases of the formation and inactivation of endogenous cannabinoid ligands as well as of their interaction with cannabinoid receptor subtypes.