The formation of N-acyl-phosphatidylethanolamine (NAPE) and N-acylethanolamine (NAE), including anandamide, in mammals in relation to neurotoxicity is discussed. Data on the characterization of the NAPE-forming N-acyltransferase, the NAPE-hydrolyzing phospholipase D, and the NAE-hydrolyzing amidase are reviewed. We suggest that NAPE and NAE, including anandamide, are formed in neurons in response to the high intracellular calcium concentrations that occur in injured neurons, e.g. due to glutamate excitotoxicity. NAPE may have functions of its own besides being a precursor for NAE. The formation of both of these lipids may serve as a cytoprotective response, whether mediated by physical interactions with membranes or enzymes, or mediated by activation of cannabinoid receptors. This suggestion implies that NAPE and NAE may have pathophysiological roles in the brain. Whether these lipids also have physiological roles is uncertain.