Intercellular signaling dynamics critically influence the functional roles that the signals can play. Small lipids are synthesized and released from neurons, acting as intercellular signals in regulating neurotransmitter release, modulating ion channels on target cells, and modifying synaptic plasticity. The repertoire of biological effects of lipids such as endocannabinoids (eCBs) is rapidly expanding, yet lipid signaling dynamics have not been studied. The eCB system constitutes a powerful tool for bioassaying the dynamics of lipid signaling. The eCBs are synthesized in, and released from, postsynaptic somatodendritic domains that are readily accessible to whole-cell patch electrodes. The dramatic effects of these lipid signals are detected electrophysiologically as CB1-dependent alterations in conventional synaptic transmission, which therefore serve as a sensitive reporter of eCB actions. We used electrophysiological recording, photolytic release of caged glutamate and a newly developed caged AEA (anandamide), together with rapid [Ca2+]i measurements, to investigate the dynamics of retrograde eCB signaling between CA1 pyramidal cells and GABAergic synapses in rat hippocampus in vitro. We show that, at 22°C, eCB synthesis and release must occur within 75-190 ms after the initiating stimulus, almost an order of magnitude faster than previously thought. At 37°C, the time could be <50 ms. Activation of CB1 and downstream processes constitute a significant fraction of the total delay and are identified as major rate-limiting steps in retrograde signaling. Our findings imply that lipid messenger dynamics are comparable with those of metabotropic neurotransmitters and can modulate neuronal interactions on a similarly fast time scale.