JTE-907 [N-(benzo[1,3]dioxol-5-ylmethyl)-7-methoxy-2-oxo-8-pentyloxy-1,2-dihydroquinoline-3-carboxamide] was evaluated in vitro and in vivo as a novel selective ligand for cannabinoid receptor of peripheral type (CB2). The compound binds with high affinity to human CB2 or mouse CB2 expressed on CHO cell membrane and to rat CB2 on splenocytes. The K(i) affinities for human, mouse, and rat CB2 were 35.9, 1.55, and 0.38 nM, respectively. The selectivity ratio for the CB2 receptors compared with central nervous type receptors (CB1) of human (expressed on CHO cells), and mouse and rat CB1 on cerebellum were 66, 684, and 2760, respectively. JTE-907 showed concentration-dependent increase of forskolin-stimulated cAMP production in CHO cells expressing human and mouse CB2 in vitro, i.e., JTE-907 behaved as an inverse agonist, which is in contrast to Win55212-2 that reduces cAMP as an agonist. JTE-907 dosed orally inhibited carrageenin-induced mouse paw edema dose dependently. The same in vivo effect was observed with other cannabinoid receptor ligands such as SR144528, Delta(9)-tetrahydrocannabinol (THC), and Win55212-2. This is the first report that a CB2-selective inverse agonist, JTE-907, has an anti-inflammatory effect in vivo, and how the inverse agonist showed the same effect as Win55212-2 and Delta(9)-THC is discussed.