Marijuana affects neural functions through the binding of its active component (Delta(9)-THC) to cannabinoid receptors in the CNS. Recent studies have elucidated that endogenous ligands for cannabinoid receptors, endocannabinoids, serve as retrograde messengers at central synapses. Endocannabinoids are produced on demand in activity-dependent manners and released from postsynaptic neurons. The released endocannabinoids travel backward across the synapse, activate presynaptic CB1 cannabinoid receptors, and modulate presynaptic functions. Retrograde endocannabinoid signaling is crucial for certain forms of short-term and long-term synaptic plasticity at excitatory or inhibitory synapses in many brain regions, and thereby contributes to various aspects of brain function including learning and memory. Molecular identities of the CB1 receptor and enzymes involved in production and degradation of endocannabinoids have been elucidated. Anatomical studies have demonstrated unique distributions of these molecules around synapses, which provide morphological bases for the roles of endocannabinoids as retrograde messengers. CB1-knockout mice exhibit various behavioral abnormalities and multiple defects in synaptic plasticity, supporting the notion that endocannabinoid signaling is involved in various aspects of neural function. In this review article, the authors describe molecular mechanisms of the endocannabinoid-mediated synaptic modulation and its possible physiological significance.