The role of palmitoylethanolamide (PEA) in the regulation of complex systems involved in the inflammatory response, pruritus, neurogenic and neuropathic pain is well understood. Growing evidence indicates that this Nacylethanolamine also exerts neuroprotective effects within the central nervous system (CNS), i.e. in spinal cord and traumatic brain injuries and in age-related pathological processes. PEA is abundant in the CNS, and is produced by glial cells. Several studies show that administering PEA during the first few hours after injury significantly limits CNS damage, reduces loss of neuronal tissue and improves functional recovery. PEA appears to exert its protective effect by decreasing the development of cerebral edema, down-regulating the inflammatory cascade, and limiting cellular necrosis and apoptosis. All these are plausible mechanisms of neuroprotection. This review provides an overview of current knowledge of PEA effect on glial functions in the brain and how targeting glial-specific pathways might ultimately impact the development of therapies for clinical management of neurodegenerative disorders. The diverse signaling mechanisms are also summarized.