The study describes the formation and inactivation of endogenous cannabinoid anandamide in central neurons. Anandamide, a brain arachidonate derivative that binds to and activates cannabinoid receptors, is produced in and released from cultured brain neurons in a calcium ion-dependent manner when neurons are stimulated with membrane-depolarizing agents. Anandamide formation occurs through phosphodiesterase-mediated cleavage of a novel phospholipid precursor, N-arachidonoyl-phosphatidylethanolamine. A similar mechanism also governs the formation of a family of anandamide congeners. The life span of extracellular anandamide is limited by a rapid and selective process of cellular uptake, which is accompanied by hydrolytic degradation to ethanolamine and arachidonate. The results strongly support the proposed role of anandamide as an endogenous neuronal messenger. The study also shows that brain neurons produce, release and inactivate anandamide, strongly supporting a role for this arachidonate derivative as an endogenous cannabinoid substance. Anandamide may be synthesized by condensation of arachidonate with ethanolamine, a reaction catalyzed by NAE amidohydrolase acting in reverse or by anandamide synthetase. The results suggest that an endogenous amidohydrolase activity catalyses the cleavage of anandamide to ethanolamine and arachidonate, which are then incorporated into phospholipids. The study provides further evidence to support the idea that the sculpting of neural crest into discrete streams which will populate and pattern the branchial arches is achieved by a mechanism intrinsic to the neuroepithelium.The study describes the formation and inactivation of endogenous cannabinoid anandamide in central neurons. Anandamide, a brain arachidonate derivative that binds to and activates cannabinoid receptors, is produced in and released from cultured brain neurons in a calcium ion-dependent manner when neurons are stimulated with membrane-depolarizing agents. Anandamide formation occurs through phosphodiesterase-mediated cleavage of a novel phospholipid precursor, N-arachidonoyl-phosphatidylethanolamine. A similar mechanism also governs the formation of a family of anandamide congeners. The life span of extracellular anandamide is limited by a rapid and selective process of cellular uptake, which is accompanied by hydrolytic degradation to ethanolamine and arachidonate. The results strongly support the proposed role of anandamide as an endogenous neuronal messenger. The study also shows that brain neurons produce, release and inactivate anandamide, strongly supporting a role for this arachidonate derivative as an endogenous cannabinoid substance. Anandamide may be synthesized by condensation of arachidonate with ethanolamine, a reaction catalyzed by NAE amidohydrolase acting in reverse or by anandamide synthetase. The results suggest that an endogenous amidohydrolase activity catalyses the cleavage of anandamide to ethanolamine and arachidonate, which are then incorporated into phospholipids. The study provides further evidence to support the idea that the sculpting of neural crest into discrete streams which will populate and pattern the branchial arches is achieved by a mechanism intrinsic to the neuroepithelium.