Anandamide (AEA) is an endogenous ligand of cannabinoid receptors and a well characterized mediator of many physiological processes including inflammation, pain, and appetite. The biosynthetic pathway(s) for anandamide and its N-acyl ethanolamine (NAE) congeners remain enigmatic. Previously, we proposed an enzymatic route for producing NAEs that involves the double-O-deacylation of N-acyl phosphatidylethanolamines (NAPEs) by alpha/beta-hydrolase 4 (ABDH4 or Abh4) to form glycerophospho (GP)-NAEs, followed by conversion of these intermediates to NAEs by an unidentified phosphodiesterase. Here, we report the detection and measurement of GP-NAEs, including the anandamide precursor glycerophospho-N-arachidonoylethanolamine (GP-NArE), as endogenous constituents of mouse brain tissue. Inhibition of the phosphodiesterase-mediated degradation of GP-NAEs ex vivo resulted in a striking accumulation of these lipids in brain extracts, suggesting a rapid endogenous flux through this pathway. Furthermore, we identify the glycerophosphodiesterase GDE1, also known as MIR16, as a broadly expressed membrane enzyme with robust GP-NAE phosphodiesterase activity. Together, these data provide evidence for a multistep pathway for the production of anandamide in the nervous system by the sequential actions of Abh4 and GDE1.