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The endocannabinoid system (ECS) is composed of the endocannabinoid ligands anandamide (AEA) and 2-arachidonoylgycerol (2-AG), their target cannabinoid receptors (CB1 and CB2) and the enzymes involved in their synthesis and metabolism (N-acyltransferase and fatty acid amide hydrolase (FAAH) in the case of AEA and diacylglycerol lipase (DAGL) and monoacylglycerol lipase (MAGL) in the case of 2-AG). The origins of ECS dysfunction in major neuropsychiatric disorders remain to be determined, and this paper explores the possibility that they may be associated with chronically increased nitro-oxidative stress and activated immune-inflammatory pathways, and it examines the mechanisms which might be involved. Inflammation and nitro-oxidative stress are associated with both increased CB1 expression, via increased activity of the NADPH oxidases NOX4 and NOX1, and increased CNR1 expression and DNA methylation; and CB2 upregulation via increased pro-inflammatory cytokine levels, binding of the transcription factor Nrf2 to an antioxidant response element in the CNR2 promoter region and the action of miR-139. CB1 and CB2 have antagonistic effects on redox signalling, which may result from a miRNA-enabled negative feedback loop. The effects of inflammation and oxidative stress are detailed in respect of AEA and 2-AG levels, via effects on calcium homeostasis and phospholipase A2 activity; on FAAH activity, via nitrosylation/nitration of functional cysteine and/or tyrosine residues; and on 2-AG activity via effects on MGLL expression and MAGL. Finally, based on these detailed molecular neurobiological mechanisms, it is suggested that cannabidiol and dimethyl fumarate may have therapeutic potential for major depressive disorder, bipolar disorder and schizophrenia.