Palmitoylethanolamide (PEA), the naturally occurring amide of ethanolamine and palmitic acid, is an endogenous lipid that modulates pain and inflammation. Although the anti-inflammatory effects of PEA were first characterized nearly 50 years ago, the identity of the receptor mediating these actions has long remained elusive. We recently identified the ligand-activated transcription factor, peroxisome proliferator-activated receptor-alpha (PPAR-alpha), as the receptor mediating the anti-inflammatory actions of this lipid amide. Here we outline the history of PEA, starting with its initial discovery in the 1950s, and discuss the pharmacological properties of this compound, particularly in regards to its ability to activate PPAR-alpha.