Endocannabinoids are lipid mediators of the same cannabinoid (CB) receptors that mediate the effects of marijuana. The endocannabinoid system (ECS) consists of CB receptors, endocannabinoids, and the enzymes involved in their biosynthesis and degradation, and it is present in both brain and peripheral tissues, including the liver. The hepatic ECS is activated in various liver diseases and contributes to the underlying pathologies. In patients with cirrhosis of various etiologies, the activation of vascular and cardiac CB₁ receptors by macrophage‐derived and platelet‐derived endocannabinoids contributes to the vasodilated state and cardiomyopathy, which can be reversed by CB₁ blockade. In mouse models of liver fibrosis, the activation of CB₁ receptors on hepatic stellate cells is fibrogenic, and CB₁ blockade slows the progression of fibrosis. Fatty liver induced by a high‐fat diet or chronic alcohol feeding depends on the activation of peripheral receptors, including hepatic CB₁ receptors, which also contribute to insulin resistance and dyslipidemias. Although the documented therapeutic potential of CB₁ blockade is limited by neuropsychiatric side effects, these may be mitigated by using novel, peripherally restricted CB₁ antagonists. (Hepatology 2011;)