Endocannaboid signaling plays a regulatory role in various (neuro)biological functions. 2-Arachidonoyglycerol (2-AG) is the most abundant endocannabinoid, and while its canonical biosynthetic pathway involving phosphoinositide-specific phospholipase C and diacylglycerol lipase α is known, alternative pathways remain unsettled. Here, we characterize a non-canonical pathway implicating glycerophosphodiesterase 3 (GDE3, from GDPD2 gene). Human GDE3 expressed in HEK293T cell membranes catalyzed the conversion of lysophosphatidylinositol (LPI) into monoacylglycerol and inositol-1-phosphate. The enzyme was equally active against 1-acyl- and 2-acyl-LPI. When using 2-acyl LPI, where arachidonic acid is the predominant fatty acid, LC-MS analysis identified 2-AG as the main product of LPI hydrolysis by GDE3. Furthermore, inositol-1-phosphate release into the medium occurred upon addition of LPI to intact cells, suggesting that GDE3 is actually an ecto-lysophospholipase C. In cells expressing G-protein-coupled receptor GPR55, GDE3 abolished 1-acyl-LPI-induced signaling. In contrast, upon simultaneous expression of GDE3 and cannabinoid receptor CB2, 2-acyl-LPI evoked the same signal as that induced by 2-AG. These data strongly suggest that, beside simply degrading the GPR55 LPI ligand, GDE3 can act as a switch between GPR55 and CB2 signaling. Coincident with a major expression of both GDE3 and CB2 in spleen, spleens from transgenic mice lacking GDE3 displayed doubling of LPI content, compared to wild type mice. Decreased production of 2-AG in whole spleen was also observed, supporting the in vivo relevance of our findings. These data thus open a new research avenue in the field of endocannabinoid generation and reinforce the view of GPR55/LPI being genuine actors of endocannabinoid system.