Marijuana has been used as a traditional medicine and a pleasure-inducing drug for thousands of years around the world, especially in Asia. Delta(9)-tetrahydrocannabinol, major psychoactive component of marijuana, has been shown to interact with specific cannabinoid receptors, thereby eliciting a variety of pharmacological responses in experimental animals and human. In 1990, the gene encoding a cannabinoid receptor (CB1) was cloned. This prompted the search for endogenous ligands. In 1992, N-arachidonoylethanolamine (anandamide) was isolated from pig brain as an endogenous ligand, and in 1995, 2-arachidonoylglycerol was isolated from rat brain and canine gut as another endogenous ligand. Both anandamide and 2-arachidonoylglycerol exhibit various cannabimimetic activities. The results of structure-activity relationship experiments, however, revealed that 2-arachidonoylglycerol, but not anandamide, is the intrinsic natural ligand for the cannabinoid receptor. 2-arachidonoylglycerol is a degradation product of inositol phospholipids that links the function of the cannabinoid receptors with the enhanced inositol phospholipid turnover in stimulated tissues and cells. The possible physiological roles of cannabinoid receptors and 2-arachidonoylglycerol in various mammalian tissues such as those of the nervous and inflammatory cells are demonstrated. Furthermore, the future development of therapeutic drugs coming from this endocannabinoid system are discussed.