The endocannabinoid signaling system is composed of the cannabinoid receptors; their endogenous ligands, the endocannabinoids; the enzymes that produce and inactivate the endocannabinoids; and the endocannabinoid transporters. The endocannabinoids are a new family of lipidic signal mediators, which includes amides, esters, and ethers of long-chain polyunsaturated fatty acids. Endocannabinoids signal through the same cell surface receptors that are targeted by Δ9-tetrahydrocannabinol (Δ9-THC), the active principles of cannabis sativa preparations like hashish and marijuana. The biosynthetic pathways for the synthesis and release of endocannabinoids are still rather uncertain. Unlike neurotransmitter molecules that are typically held in vesicles before synaptic release, endocannabinoids are synthesized on demand within the plasma membrane. Once released, they travel in a retrograde direction and transiently suppress presynaptic neurotransmitter release through activation of cannabinoid receptors. The endocannabinoid signaling system is being found to be involved in an increasing number of pathological conditions. In the brain, endocannabinoid signaling is mostly inhibitory and suggests a role for cannabinoids as therapeutic agents in central nervous system (CNS) disease. Their ability to modulate synaptic efficacy has a wide range of functional consequences and provides unique therapeutic possibilities. The present review is focused on new information regarding the endocannabinoid signaling system in the brain. First, the structure, anatomical distribution, and signal transduction mechanisms of cannabinoid receptors are described. Second, the synthetic pathways of endocannabinoids are discussed, along with the putative mechanisms of their release, uptake, and degradation. Finally, the role of the endocannabinoid signaling system in the CNS and its potential as a therapeutic target in various CNS disease conditions, including alcoholism, are discussed.