Palmitoylethanolamide (N-palmitoylethanolamine or PEA) is an endogenous fatty acid amide belonging to the N-acylethanolamine (NAE) class of signalling molecules. Earliest reports on the anti-inflammatory and immune modulating properties of PEA date back to 1957 when its isolation from soy lecithin, peanut meal, and egg yolk was reported. PEA is structurally related to anandamide and other endocannabinoids and possesses similar pathways for synthesis and breakdown. However, instead of being an endocannabinoid per se, PEA may be called a ‘promiscuous’ compound. It does not bind to cannabinoid receptors but interacts with several other receptors and non-receptor targets. This rather complex biology has indisputably contributed to the initially slow development of PEA, which witnessed a revival around 1993 with the seminal work of the late Rita Levi-Montalcini. Presently the compound is receiving increasing attention as a drug or nutraceutical against chronic pain, inflammation and degenerative diseases of the central nervous system. In this paper we review the development and pharmacology of this remarkable lipid mediator with its pleiotropic and ‘promiscuous’ character. The history of PEA exemplifies an evolving paradigm shift in pharma and nutrition from ‘single-target’ to ‘multiple-target’ approaches and provides new perspectives for future development in these fields.