Fatty acid amide hydrolase (FAAH) is an enzyme that degrades anandamide, an endocannabinoid that modulates mesolimbic dopamine release and, consequently, influences states of well-being. Despite these known interactions, the specific role of FAAH in subjective well-being remains underexplored. Since well-being is a dynamic trait that can fluctuate over time, we hypothesized that we could provide deeper insights into the link between FAAH and well-being using longitudinal data. To this end, we analyzed well-being data collected three years apart using the WHO (Ten) Well-Being Index and genotyped a functional polymorphism in the FAAH gene (rs324420, Pro129Thr) in a sample of 2822 individuals. We found that the A-allele of rs324420, which results in reduced FAAH activity and elevated anandamide levels, was associated with lower well-being scores at both time points (Wave I, B: −0.52, p = 0.007; Wave II, B: −0.41, p = 0.03, adjusted for age and sex). A subsequent phenome-wide association study (PheWAS) affirmed our well-being findings in the UK Biobank (N = 126,132, alternative C-allele associated with elevated happiness, p = 0.008) and revealed an additional association with alcohol dependence. In our cohort, using lagged longitudinal mediation analyses, we uncovered evidence of an indirect association between rs324420 and problematic alcohol use (AUDIT-P) through the pathway of lower well-being (indirect effect Boot: 0.015, 95% CI [0.003, 0.030], adjusted for AUDIT in Wave I). We propose that chronically elevated anandamide levels might influence disruptions in the endocannabinoid system—a biological contributor to well-being—which could, in turn, contribute to increased alcohol intake, though multiple factors may be at play. Further genetic studies and mediation analyses are needed to validate and extend these findings.