The study of endocannabinoid pharmacology has proceeded from the discovery of Δ9-tetrahydrocannabinol, the main psychoactive compound in Cannabis sativa, to the identification of an endogenous endocannabinoid system that is essential for physiological modulation of neuronal functions. We have not yet achieved a complete understanding of the various roles of the endocannabinoids, but this is one of the fastest-growing fields in psychopharmacology. This review starts with a brief historical description of the discovery of the endocannabinoids and then focuses on recent pharmacological advances and recently discovered endocannabinoid mechanisms of action (e.g. functional selectivity, allosterism, and receptor trafficking). Finally, we will discuss the contention that the existence of evidence-based therapeutic applications for cannabinoids and the wide range of physiological functions affected by endocannabinoids suggests that the careful study of the endocannabinoid system may lead to the development of novel therapeutic drugs with higher societal acceptability and lower side effects profiles.