The present review evaluates the evidence that the endocannabinoid system plays in the development of tolerance to alcohol. The identification of a G-protein-coupled receptor, namely, the cannabinoid receptor (CB(1) receptor), which was activated by Delta(9)-tetrahydrocannabinol (Delta(9)-THC), the major psychoactive component of marijuana, led to the discovery of endogenous cannabinoid agonists. Until now, four fatty acid derivatives identified to be arachidonylethanolamide (AEA), 2-arachidonylglycerol (2-AG), 2-arachidonylglycerol ether (noladin ether) and virodhamine have been isolated from both nervous and peripheral tissues. Both AEA and 2-AG have been shown to mimic the pharmacological and behavioural effects of Delta(9)-THC. The role of the endocannabinoid system in the development of tolerance to alcohol was not known until recently. Recent studies from our laboratory have implicated for the first time a role for the endocannabinoid system in development of tolerance to alcohol. Chronic alcohol treatment has been shown to down-regulate CB(1) receptors and its signal transduction. The observed downregulation of CB(1) receptor function results from the persistent stimulation of the receptors by AEA and 2-AG, the synthesis of which has been shown to be increased by chronic alcohol treatment. The enhanced formation of endocannabinoids may subsequently influence the release of neurotransmitters. It was found that the DBA/2 mice, known to avoid alcohol intake, have significantly reduced CB(1) receptor function in the brain, consistent with other studies in which the CB(1) receptor antagonist SR 141716A has been shown to block voluntary alcohol intake in rodents. Similarly, activation of the CB(1) receptor system promoted alcohol craving, suggesting a role for the CB(1) receptor gene in excessive alcohol drinking behaviour and development of alcoholism. Ongoing investigations may lead to a better understanding of the mechanisms underlying the development of tolerance to alcohol and to develop therapeutic strategies to treat alcoholism.