The insular cortex is an important region of brain involved in the processing of pain and emotion. Recent studies indicate that lesions in the insular cortex induce pain asymbolia and reverse neuropathic pain. Endogenous cannabinoids (endocannabinoids), which have been shown to attenuate pain, are simultaneously degraded by fatty acid amide hydrolase (FAAH) that halts the mechanisms of action. Selective inhibitor URB597 suppresses FAAH activity by conserving endocannabinoids, which reduces pain. The present study examined the analgesic effects of URB597 treatment in the insular cortex of an animal model of neuropathic pain. Under pentobarbital anesthesia, male Sprague–Dawley rats were subjected to nerve injury and cannula implantation. On postoperative day 14, rodents received microinjection of URB597 into the insular cortex. In order to verify the analgesic mechanisms of URB597, cannabinoid 1 receptor (CB1R) antagonist AM251, peroxisome proliferator-activated receptor alpha (PPAR alpha) antagonist GW6471, and transient receptor potential vanilloid 1 (TRPV1) antagonist Iodoresiniferatoxin (I-RTX) were microinjected 15 min prior to URB597 injection. Changes in mechanical allodynia were measured using the von-Frey test. Expressions of CB1R, N-acyl phosphatidylethanolamine phospholipase D (NAPE-PLD), and TRPV1 significantly increased in the neuropathic pain group compared to the sham-operated control group. Mechanical threshold and expression of NAPE-PLD significantly increased in groups treated with 2 nM and 4 nM URB597 compared with the vehicle-injected group. Blockages of CB1R and PPAR alpha diminished the analgesic effects of URB597. Inhibition of TRPV1 did not effectively reduce the effects of URB597 but attenuated expression of NAPE-PLD compared with the URB597-injected group. In addition, optical imaging demonstrated that neuronal activity of the insular cortex was reduced following URB597 treatment. Our results suggest that microinjection of FAAH inhibitor into the insular cortex causes analgesic effects by decreasing neural excitability and increasing signals related to the endogenous cannabinoid pathway in the insular cortex.