Anandamide is an endogenous ligand of cannabinoid receptors that induces pharmacological responses in animals similar to those of cannabinoids such as delta9-tetrahydrocannabinol (THC). Typical pharmacological effects of cannabinoids include disruption of pain, memory formation, and motor coordination, systems that all depend on NMDA receptor mediated neurotransmission. We investigated whether anandamide can influence NMDA receptor activity by examining NMDA-induced calcium flux (deltaCa2+NMDA) in rat brain slices. The presence of anandamide reduced deltaCa2+NMDA and the inhibition was disrupted by cannabinoid receptor antagonist, pertussis toxin treatment, and agatoxin (a calcium channel inhibitor). Whereas these treatments prevented anandamide inhibiting deltaCa2+NMDA, they also revealed another, underlying mechanism by which anandamide influences deltaCa2+NMDA. In the presence of cannabinoid receptor antagonist, anandamide potentiated deltaCa2+NMDA in cortical, cerebellar, and hippocampal slices. Anandamide (but not THC) also augmented NMDA-stimulated currents in Xenopus oocytes expressing cloned NMDA receptors, suggesting a capacity to directly modulate NMDA receptor activity. In a similar manner, anandamide enhanced neurotransmission across NMDA receptor-dependent synapses in hippocampus in a manner that was not mimicked by THC and was unaffected by cannabinoid receptor antagonist. These data demonstrate that anandamide can modulate NMDA receptor activity in addition to its role as a cannabinoid receptor ligand.