Cyclooxygenases (COX) play an important role in lipid signaling by oxygenating arachidonic acid to endoperoxide precursors of prostaglandins and thromboxane. Two cyclooxygenases exist which differ in tissue distribution and regulation but otherwise carry out identical chemical functions. The neutral arachidonate derivative, 2-arachidonylglycerol (2-AG), is one of two described endocannabinoids and appears to be a ligand for both the central (CB1) and peripheral (CB2) cannabinoid receptors. Here we report that 2-AG is a substrate for COX-2 and that it is metabolized as effectively as arachidonic acid. COX-2-mediated 2-AG oxygenation provides the novel lipid, prostaglandin H(2) glycerol ester (PGH(2)-G), in vitro and in cultured macrophages. PGH(2)-G produced by macrophages is a substrate for cellular PGD synthase, affording PGD(2)-G. Pharmacological studies reveal that macrophage production of PGD(2)-G from endogenous sources of 2-AG is calcium-dependent and mediated by diacylglycerol lipase and COX-2. These results identify a distinct function for COX-2 in endocannabinoid metabolism and in the generation of a new family of prostaglandins derived from diacylglycerol and 2-AG.