Fatty acid amide hydrolase (FAAH) is a mammalian integral membrane enzyme that degrades the fatty acid amide family of endogenous signaling lipids, which includes the endogenous cannabinoid anandamide and the sleep-inducing substance oleamide. FAAH belongs to a large and diverse class of enzymes referred to as the amidase signature (AS) family. Investigations into the structure and function of FAAH, in combination with complementary studies of other AS enzymes, have engendered provocative molecular models to explain how this enzyme integrates into cell membranes and terminates fatty acid amide signaling in vivo. These studies, as well as their biological and therapeutic implications, are the subject of this review.