This review highlights some important advances that have taken place in cannabinoid research over the last four years. It focuses on novel ligands that are of interest either as experimental tools or as lead compounds for therapeutic agents and possible clinical applications for some of these ligands. The molecular targets for these compounds are various components of the system of endogenous cannabinoids (endocannabinoids) and receptors that together constitute the 'endocannabinoid system'. These are CB(1) cannabinoid receptors that are present mainly on central and peripheral neurones, CB(2) cannabinoid receptors that are expressed predominantly by immune cells, the biochemical mechanisms responsible for the tissue uptake or metabolism of endocannabinoids and vanilloid receptors. Other cannabinoid receptor types may also exist. Recently developed ligands include potent and selective agonists for CB(1) and CB(2) receptors, a potent CB(2)-selective antagonist/inverse agonist and inhibitors of endocannabinoid uptake or metabolism. Future research should be directed at characterising the endocannabinoid system more completely and at obtaining more conclusive clinical data about the possible beneficial effects of cannabinoids as well as their adverse effects. There is also a need for improved cannabinoid formulations/modes of administration in the clinic and advances in this area should be facilitated by the recent development of a potent water-soluble CB(1)/CB(2) receptor agonist. A growing number of strategies for separating sought-after therapeutic effects of cannabinoid receptor agonists from the unwanted consequences of CB(1) receptor activation are now emerging and these are discussed at the end of this review.