Traumatic brain injury (TBI) is the leading cause of death in young adults in the United States, but there is still no effective agent for treatment. N-arachidonoylethanolamine (anandamide, AEA) is a major endocannabinoid in the brain. Its increase after brain injury is believed to be protective. However, the compensatory role of AEA is transient due to its rapid hydrolysis by the fatty acid amide hydrolase (FAAH). Thus, inhibition of FAAH can boost the endogenous levels of AEA and prolong its protective effect. Using a TBI mouse model, we found that post-injury chronic treatment with PF3845, a selective and potent FAAH inhibitor, reversed TBI-induced impairments in fine motor movement, hippocampus dependent working memory and anxiety-like behavior. Treatment with PF3845 inactivated FAAH activity and enhanced the AEA levels in the brain. It reduced neurodegeneration in the dentate gyrus, and up-regulated the expression of Bcl-2 and Hsp70/72 in both cortex and hippocampus. PF3845 also suppressed the increased production of amyloid precursor protein, prevented dendritic loss and restored the levels of synaptophysin in the ipsilateral dentate gyrus. Furthermore, PF3845 suppressed the expression of inducible nitric oxide synthase and cyclooxygenase-2 and enhanced the expression of arginase-1 post-TBI, suggesting a shift of microglia/macrophages from M1 to M2 phenotype. The effects of PF3845 on TBI-induced behavioral deficits and neurodegeneration were mediated by activation of cannabinoid type 1 and 2 receptors and might be attributable to the phosphorylation of ERK1/2 and AKT. These results suggest that selective inhibition of FAAH is likely to be beneficial for TBI treatment.