N-arachidonoyl dopamine (NADA) is an endogenous ligand that activates the cannabinoid type 1 receptor and the transient receptor potential vanilloid type 1 channel. Two potential biosynthetic pathways for NADA have been proposed, though no conclusive evidence exists for either. The first is the direct conjugation of arachidonic acid with dopamine and the other is via metabolism of a putative N-arachidonoyl tyrosine (NA-tyrosine). In the present study we investigated these biosynthetic mechanisms and report that NADA synthesis requires TH in dopaminergic terminals; however, NA-tyrosine, which we identify here as an endogenous lipid, is not an intermediate. We show that NADA biosynthesis primarily occurs through an enzyme-mediated conjugation of arachidonic acid with dopamine. While this conjugation likely involves a complex of enzymes, our data suggest a direct involvement of fatty acid amide hydrolase in NADA biosynthesis either as a rate-limiting enzyme that liberates arachidonic acid from AEA, or as a conjugation enzyme, or both.