The endocannabinoids are a family of bioactive lipids that activate CB1 cannabinoid receptors in the brain and exert intense emotional and cognitive effects. Here, we have examined the role of endocannabinoid signaling in psychotic states by measuring levels of the endocannabinoid anandamide in cerebrospinal fluid (CSF) of acute paranoid-type schizophrenic patients. We found that CSF anandamide levels are eight-fold higher in antipsychotic-naive first-episode paranoid schizophrenics (n = 47) than healthy controls (n = 84), dementia patients (n = 13) or affective disorder patients (n = 22). Such an alteration is absent in schizophrenics treated with 'typical' antipsychotics (n = 37), which antagonize dopamine D2-like receptors, but not in those treated with 'atypical' antipsychotics (n = 34), which preferentially antagonize 5HT(2A) receptors. Furthermore, we found that, in nonmedicated acute schizophrenics, CSF anandamide is negatively correlated with psychotic symptoms (rS = -0.452, P = 0.001). The results suggest that anandamide elevation in acute paranoid schizophrenia may reflect a compensatory adaptation to the disease state.