Incubation of rat hepatocytes with anandamide (arachidonoylethanolamide) inhibited acetyl-CoA carboxylase activity and fatty acid synthesis de novo without affecting fatty acid synthase. This was concomitant to a decrease in the intracellular levels of malonyl-CoA. Likewise, anandamide depressed both cholesterol synthesis de novo and the incorporation of exogenous palmitate into triacylglycerols and phospholipids. On the other hand, anandamide stimulated in parallel both carnitine palmitoyltransferase I activity and ketogenesis from palmitate, though ketogenesis from octanoate was unaffected. The effects of anandamide on hepatic fatty acid synthesis and oxidation were: (a) mimicked by arachidonic acid, a product of anandamide breakdown by anandamide amidase; (b) prevented by phenylmethylsulfonyl fluoride, an inhibitor of anandamide amidase; and (c) not affected by bisindolylmaleimide, a specific inhibitor of protein kinase C. Furthermore, delta 9-tetrahydrocannabinol had no effect on any of the parameters determined, ruling out the possibility that the effects of anandamide on hepatic fatty acid metabolism are mediated by the peripheral cannabinoid receptor. The results thus indicate that anandamide might function as a carrier of arachidonic acid in the modulation of hepatic fatty metabolism.