Anandamide amidase is the hydrolytic enzyme responsible for the breakdown of anandamide, an endogenous cannabimimetic, to arachidonate and ethanolamine. Another enzymatic activity called anandamide synthase catalyzes the reverse reaction, that is the condensation of arachidonate and ethanolamine. Using a recently cloned rat fatty acid amidohydrolase (FAAH), we tested the hypothesis that the synthase and the amidase activities are catalyzed by the same enzyme. Untransfected and vector transfected (pcDNA3) COS-7 cells did not express detectable levels of either the amidase or synthase. However, when COS-7 cells were transiently transfected with a rat FAAH pcDNA3 construct, both amidase and synthase were concomitantly expressed. These results indicate that the enzymatic formation of anandamide from arachidonic acid and ethanolamine can be mediated by anandamide amidase acting in the reverse direction. The FAAH transfected cells expressed higher levels of enzyme than either rat brain homogenates or neuroblastoma cells in culture. Furthermore, the reaction rate for the amidase in FAAH transfected COS-7 cells, neuroblastoma cells and brain homogenate was always greater than the synthase reaction. These studies raise the question if this synthase reaction serves any physiological role, especially in view of the evidence that anandamide can be formed by a different pathway.