Ligand binding to the cannabinoid receptor of brain membranes has been characterized using [3H]CP 55,940 and the Multiscreen Filtration System. Binding of [3H]CP 55,940 is saturable and reaches equilibrium by 45 min at room temperature. At a concentration of 10 micrograms of membrane protein/well, the KD for [3H]CP 55,940 is 461 pM and the Bmax is 860 fmol/mg of protein. The apparent KD of [3H]CP 55,940 is dependent upon tissue protein concentration, increasing to 2,450 pM at 100 micrograms of membrane protein. Binding of [3H]CP 55,940 is dependent upon the concentration of bovine serum albumin in the buffer; the highest ratio of specific to nonspecific binding occurs between 0.5 and 1.0 mg/ml. The Ki of anandamide, a putative endogenous ligand of the cannabinoid receptor, is 1.3 microM in buffer alone and 143 nM in the presence of 0.15 mM phenylmethylsulfonyl fluoride. When [14C]anandamide is incubated with rat forebrain membranes at room temperature, it is degraded to arachidonic acid; the hydrolysis is inhibited by 0.15 mM phenylmethylsulfonyl fluoride. These results support the hypothesis that anandamide is a high-affinity ligand of the cannabinoid receptor and that it is rapidly degraded by membrane fractions.