In this article we summarize a wide variety of properties of arachidonic acid (AA) in the mammalian nervous system especially in the brain. AA serves as a biologically-active signaling molecule as well as an important component of membrane lipids. Esterified AA is liberated from the membrane by phospholipase activity which is stimulated by various signals such as neurotransmitter-mediated rise in intracellular Ca2+. AA exerts many biological actions which include modulation of the activities of protein kinases and ion channels, inhibition of neurotransmitter uptake, and enhancement of synaptic transmission. AA serves also as a precursor of a variety of eicosanoids, which are formed by oxidative metabolism of AA. AA cascade is activated under several pathological conditions in the brain such as ischemia and seizures, and may be involved in irreversible tissue damage. On the other hand, AA can show beneficial influences on brain tissues and cells in several situations. In a recent study using cultured brain neurons, we have found that AA shows quite distinct actions at a narrow concentration range, such as induction of cell death, promotion of cell survival and enhancement of neurite extension. The neurotoxic action is mediated by free radicals generated by AA metabolism, whereas the neurotrophic actions are exerted by AA itself. The observed in vitro actions of AA might be related to important roles of AA in brain pathogenesis and neural development.