The characterization of cannabinoid receptors and signal transduction mechanisms provided the impetus for the searching for endogenous ligands for this system. The result was a family of fatty acid derivatives that interact with cannabinoid receptors to varying degrees. The two ligands that have received the most attention are anandamide (AN) and 2-arachidonolyl-glycerol (Ara-Gl). They are both present in central as well as peripheral tissues. Mechanisms for the synthesis and metabolism of AN have been described. Presently, the physiological stimuli for production and release of AN are unknown. As a result, elucidation of its physiological role remains elusive. However, it seems reasonable to conclude that both AN and 2-Ara-Gl interact with cannabinoid receptors in both peripheral and central tissue to produce a wide range of effects. Administration of these ligands to laboratory animals produce effects that are quite similar to those elicited by delta9-tetrahydrocannabinol (THC), the psychoactive constituent in marijuana. Nevertheless, there are some pharmacological differences between the plant-derived THC and the endogenous cannabinoids that could be due to either pharmadynamic or pharmacokinetics dissimilarities. Extensive structure-activity relationship studies have provided some vital insights into the actions of the endogenous ligands. First and foremost, systematic structural alterations in AN have additional support that it is acting at the cannabinoid receptors in a fashion similar to that of THC. Development of metabolically stable analogs of AN, as well as those with greater receptor affinity, have helped substantiate AN and THC similarities. Nevertheless, pharmacological differences remain between the endogenous and exogenous ligands. Whether these differences are due to the nature of their interaction with the cannabinoid receptors, activation of unique signaling pathways, interactions with non-cannabinoid receptors, or pharmacokinetic considerations remain to be resolved.