Fatty acid amide hydrolase (FAAH) terminates the endocannabinoid signaling pathway that regulates numerous neurobehavioral processes in animals by hydrolyzing N-acylethanolamines (NAEs). Recently, an Arabidopsis FAAH homologue (AtFAAH) was identified, and several studies, especially those using AtFAAH overexpressing and knock-out lines, have suggested an in vivo role for FAAH in the catabolism of NAEs in plants. We previously reported that overexpression of AtFAAH in Arabidopsis resulted in accelerated seedling growth, and in seedlings that were insensitive to exogenous NAEs but hypersensitive to abscisic acid (ABA) and hypersusceptible to nonhost pathogens. Here we show that whereas the enhanced growth and NAE tolerance of the AtFAAH overexpressing seedlings depend on the catalytic activity of AtFAAH, hypersensitivity to ABA and hypersusceptibility to nonhost pathogens are independent of its enzymatic activity. Five amino acids known to be critical for rat FAAH activity are also conserved in AtFAAH (Lys-205, Ser-281, Ser-282, Ser-305, and Arg-307). Site-directed mutation of each of these conserved residues in AtFAAH abolished its hydrolytic activity when expressed in Escherichia coli, supporting a common catalytic mechanism in animal and plant FAAH enzymes. Overexpression of these inactive AtFAAH mutants in Arabidopsis showed no growth enhancement and no NAE tolerance, but still rendered the seedlings hypersensitive to ABA and hypersusceptible to nonhost pathogens to a degree similar to the overexpression of the native AtFAAH. Taken together, our findings suggest that the AtFAAH influences plant growth and interacts with ABA signaling and plant defense through distinctly different mechanisms.