Cannabinoids are cell membrane-derived signalling molecules that are released from nerves, blood cells and endothelial cells, and have diverse biological effects. They act at two distinct types of G-protein-coupled receptors, cannabinoid CB(1) and CB(2) receptors. Cannabinoid CB(1) receptors are highly localised in the central nervous system and are also found in some peripheral tissues, and cannabinoid CB(2) receptors are found outside the central nervous system, in particular in association with immune tissues. Novel actions of cannabinoids at non-CB(1) non-CB(2) cannabinoid-like receptors and vanilloid VR1 receptors have also recently been described. There is growing evidence that, among other roles, cannabinoids can act at prejunctional sites to modulate peripheral autonomic and sensory neurotransmission, and the present article is aimed at providing an overview of this. Inhibitory cannabinoid CB(1) receptors are expressed on the peripheral terminals of autonomic and sensory nerves. The role of cannabinoid receptor ligands in modulation of sensory neurotransmission is complex, as certain of these (anandamide, an "endocannabinoid", and N-arachidonoyl-dopamine, an "endovanilloid") also activate vanilloid VR1 receptors (coexpressed with cannabinoid CB(1) receptors), which excites sensory nerves and causes a release of sensory neurotransmitter. The fact that the activities of anandamide and N-arachidonoyl-dopamine span two distinct receptor families raises important questions about cannabinoid/vanilloid nomenclature, and as both compounds are structurally related to the archetypal vanilloid capsaicin, all three are arguably members of the same family of signalling molecules. Anandamide is released from nerves, but unlike classical neurotransmitters, it is not stored in and released from nerve vesicles, but is released on demand from the nerve cell membrane. In the central nervous system, cannabinoids function as retrograde signalling molecules, inhibiting via presynaptic cannabinoid CB(1) receptors the release of classical transmitter following release from the postsynaptic cell. At the neuroeffector junction, it is more likely that cannabinoids are released from prejunctional sites, as the neuroeffector junction is wide in some peripheral tissues and cannabinoids are rapidly taken up and inactivated. Understanding the actions of cannabinoids as modulators of peripheral neurotransmission is relevant to a variety of biological systems and possibly their disorders.