The anti-inflammatory effects resulting from raising the levels of palmitoylethanolamide (PEA), an endogenous bioactive lipid, led to envisage N-Acylethanolamine Acid Amidase (NAAA), the cysteine hydrolase mainly responsible for PEA degradation, as an attractive target for small molecule inhibitors. Previous work in our group identified serine-derived β-lactams as potent and systemically active inhibitors of NAAA activity. Aiming to expand the SAR study around this class of compounds, we investigated the effect of the substitution on the endocyclic nitrogen by designing and synthesizing a series of N-substituted β-lactams. The present work describes the synthesis of new N-O-alkyl and N-O-aryl substituted β-lactams and reports the results of the structure activity relationship (SAR) study leading to the discovery of a novel, single-digit nanomolar NAAA inhibitor (37). Compound 37 was shown in vitro to inhibit human NAAA via S-acylation of the catalytic cysteine, and to display very good selectivity vs. human Acid Ceramidase, a cysteine amidase structurally related to NAAA. Preliminary in vivo studies showed that compound 37, administered topically, reduced paw edema and heat hyperalgesia in a carrageenan-induced inflammation mouse model. The high in vitro potency of 37 as NAAA inhibitor, and its encouraging in vivo activity qualify this compound as a new tool for the study of the role of NAAA in inflammatory and pain states.