There have been significant developments towards the elucidation of molecular and cellular changes in neuronal second messenger pathways involved in the development of tolerance to and dependence on ethanol (EtOH). The long-term exposure to EtOH has been shown to affect several aspects of neuronal signal transduction as well as ligand-gated ion channels and receptor systems, including the receptors that are coupled to the superfamily of GTP binding regulatory proteins (G-proteins). The recent identification of a G-protein coupled receptor that was activated by delta-9-tetrahydrocannabinol (THC), the major psychoactive component of marijuana, led to the discovery of endogenous agonists. One such agonist found to exist in mammalian brain was characterized to be an arachidonic acid (AA) metabolite and was named anandamide (AnNH). AnNH has been shown to bind specifically to the cannabinoid receptor (CB(1)) and mimic many of the pharmacological and behavioural effects of THC including tolerance development. The role of endocannabinoids and the CB(1) receptor signal transduction system in tolerance development to drugs of abuse has not been explored until recently. The findings presented in this review provide evidence for the first time that some of the pharmacological actions of EtOH including tolerance development may be mediated through participation of the endocannabinoid-CB(1) receptor signal transduction system. Recent studies have shown that chronic EtOH exposure produces downregulation of CB(1) receptors and an inhibition of CB(1) receptor agonist-stimulated GTPgammaS binding in mouse brain synaptic plasma membranes (SPM). The observed receptor downregulation results from the persistent stimulation of the receptors by the endogenous CB(1) receptor agonist AnNH, the synthesis of which is increased by chronic EtOH exposure. Further, the CB(1) receptor antagonist SR-141716A has been shown to block voluntary EtOH intake in rats and mice. Based on these studies, a hypothesis is presented to explain the possible involvement of the endocannabinoid system in the pharmacological and behavioural effects of EtOH.