The topic of this review is fatty acid amide hydrolase (FAAH), one of the best-characterized enzymes involved in the hydrolysis of bioactive lipids such as anandamide, 2-arachidonoylglycerol (2-AG), and oleamide. Herein, we discuss the nomenclature, the various assays that have been developed, the relative activity of the various substrates and the reversibility of the enzyme reactions catalyzed by FAAH. We also describe the cloning of the enzyme from rat and subsequent cDNA isolation from mouse, human, and pig. The proteins and the mRNAs from different species are compared. Cloning the enzyme permitted the purification and characterization of recombinant FAAH. The conserved regions of FAAH are described in terms of sequence and function, including the amidase domain which contains the serine catalytic nucleophile, the hydrophobic domain important for self association, and the proline rich domain region, which may be important for subcellular localization. The distribution of FAAH in the major organs of the body is described as well as regional distribution in the brain and its correlation with cannabinoid receptors. Since FAAH is recognized as a drug target, a large number of inhibitors have been synthesized and tested since 1994 and these are reviewed in terms of reversibility, potency, and specificity for FAAH and cannabinoid receptors.