High-fat diet (HFD)-induced obesity and insulin resistance are associated with increased activity of the endocannabinoid/CB 1 receptor (CB 1 R) system that promotes the hepatic expression of lipogenic genes, including stearoyl-CoA desaturase-1 (SCD1). Mice deficient in CB 1 R or SCD1 remain lean and insulin-sensitive on an HFD, suggesting a functional link between the two systems. The HFD-induced increase in the hepatic levels of the endocannabinoid anandamide [i.e., arachidonoylethanolamide (AEA)] has been attributed to reduced activity of the AEA-degrading enzyme fatty acid amide hydrolase (FAAH). Here we show that HFD-induced increased hepatic AEA levels and decreased FAAH activity are absent in SCD1 −/− mice, and the monounsaturated fatty acid (MUFA) products of SCD1, palmitoleic and oleic acid, inhibit FAAH activity in vitro at low micromolar concentrations. HFD markedly increases hepatic SCD1 activity in WT mice as well as in CB 1 R −/− mice with transgenic reexpression of CB 1 R in hepatocytes, but not in global CB 1 R −/− mice. Treatment of HFD-fed mice with the SCD1 inhibitor A939572 prevents the diet-induced reduction of hepatic FAAH activity, normalizes hepatic AEA levels, and improves insulin sensitivity. SCD1 −/− mice on an HFD remain insulin-sensitive, but develop glucose intolerance and insulin resistance in response to chronic treatment with the FAAH inhibitor URB597. An HFD rich in MUFA or feeding mice pure oleic acid fail to inhibit hepatic FAAH activity. We conclude that MUFAs generated via SCD1 activity, but not dietderived MUFAs, function as endogenous FAAH inhibitors mediating the HFD-induced increase in hepatic AEA, which then activates hepatic CB 1 R to induce insulin resistance.T he endocannabinoid system includes cannabinoid receptors, endogenous ligands that activate them-with arachidonoylethanolamide (AEA) and 2-arachidonoylglycerol (2-AG) being the two most widely investigated-and mechanisms for endocannabinoid biosynthesis and inactivation (1, 2). The latter occurs through cellular reuptake facilitated by a putative membrane transporter and is followed by enzymatic degradation by hydrolytic enzymes, including fatty acid amide hydrolase (FAAH) (3) and monoacylglycerol lipase (MAGL) (4, 5). FAAH was the first enzyme responsible for endocannabinoid hydrolysis to be purified and characterized. It exists as a dimer in its membrane-associated form, and possesses an unusual binding site and mechanism of catalytic action using a Ser-Ser-Lys triad (6, 7). Several endogenous compounds have been identified as good substrates for FAAH, including AEA and related fatty acid amides such as oleoylethanolamide (OEA) and palmitoylethanolamide, the tissue levels of which increase following genetic ablation or pharmacological inhibition of FAAH. Although FAAH can also degrade 2-AG in vitro (7), the enzyme that most specifically controls the levels of 2-AG is MAGL (4, 5), and 2-AG tissue levels remain unchanged in the absence of FAAH or FAAH activity in vivo (8).Endocannabinoids produce a broad range of...