The discovery of multipotent neural progenitor (NP) cells has provided strong support for the existence of neurogenesis in the adult brain. However, the signals controlling NP proliferation remain elusive. Endocannabinoids, the endogenous counterparts of marijuana-derived cannabinoids, act as neuromodulators via presynaptic CB1 receptors and also control neural cell death and survival. Here we show that progenitor cells express a functional endocannabinoid system that actively regulates cell proliferation both in vitro and in vivo. Specifically, NPs produce endocannabinoids and express the CB1 receptor and the endocannabinoid-inactivating enzyme fatty acid amide hydrolase (FAAH). CB1 receptor activation promotes cell proliferation and neurosphere generation, an action that is abrogated in CB1-deficient NPs. Accordingly, proliferation of hippocampal NPs is increased in FAAH-deficient mice. Our results demonstrate that endocannabinoids constitute a new group of signaling cues that regulate NP proliferation and thus open novel therapeutic avenues for manipulation of NP cell fate in the adult brain.