Immune modulation by cannabinoids has been widely established over the past three decades. In spite of this, the mechanism of action responsible for immune modulation and other well described biological effects attributed to cannabinoid compounds has been elusive. The identification and cloning of two novel G protein coupled receptors, CB1 and CB2, both of which bind cannabimimetic agents has served as the basis for a putative mechanism of action. CB1, which is also referred to as the central cannabinoid receptor is the primary form expressed within the central nervous system (CNS). Conversely, the peripheral cannabinoid receptor, CB2, does not appear to be expressed within the CNS but is the predominant form of the receptor expressed within the immune system. Both CB1 and CB2 negatively regulate adenylate cyclase activity through a pertussis toxin sensitive GTP-binding protein. Recent investigations addressing the mechanism by which cannabinoids disrupt leukocyte function have demonstrated that in the presence of cannabinoids the cAMP signaling cascade is markedly inhibited as evidenced by decreased adenylate cyclase and protein kinase A activity and decreased DNA binding by cAMP response element binding proteins. The focus of this discussion will be on the effects cannabinoids elicit on events within the cAMP cascade and related signaling pathways critical to the regulation of cytokine genes.