N-Acylethanolamine acid amidase (NAAA) is an N-terminal cysteine hydrolase primarily found in the endosomal-lysosomal compartment of innate and adaptive immune cells. NAAA catalyzes the hydrolytic deactivation of palmitoylethanolamide (PEA), a lipid-derived peroxisome proliferator-activated receptor-α (PPAR-α) agonist that exerts profound anti-inflammatory effects in animal models. Emerging evidence points to NAAA-regulated PEA signaling at PPAR-α as a critical control point for the induction and the resolution of inflammation and to NAAA itself as a target for anti-inflammatory medicines. The present Perspective discusses three key aspects of this hypothesis: the role of NAAA in controlling the signaling activity of PEA; the structural bases for NAAA function and inhibition by covalent and noncovalent agents; and finally, the potential value of NAAA-targeting drugs in the treatment of human inflammatory disorders.