Cannabinoid pharmacology has made important advances in recent years after the discovery of the cannabinoid receptors. These discoveries have added to our understanding of exogenous and endogenous cannabinoid signaling along with exploring the various pathways of their biosynthesis, molecular structure, inactivation, and anatomical distribution of their receptors throughout the body. The endocannabinoid system is involved in immunoregulation and neuroprotection. In this article, we have reviewed the possible mechanisms of the regulation of the immune response by endocannabinoids which include modulation of immune response in different cell types, effect on cytokine network, induction of apoptosis in immune cells and downregulation of innate and adaptive immune response. Studies from our laboratory have suggested that administration of endocannabinoids or use of inhibitors of enzymes that breakdown the endocannabinoids, leads to immunosuppression and recovery from immune-mediated injury to organs such as the liver. Thus, manipulation of endocannabinoids in vivo may constitute a novel treatment modality against inflammatory disorders.