The results of recent studies indicate that high levels of free fatty acids(FFAs) and adipokines may be the main causes of non-alcoholic liver disease; however, the molecular mechanism that links FFAs to lipotoxicity remains unclear. In the present study, we treated HepG2 cells with FFA(either palmitate or oleate) to investigate the mechanisms involved in lipotoxicity in the liver cells. We also treated cells with palmitate in the presence of a chemical chaperone, 4-phenylbutyric acid(PBA), to confirm the involvement of ER stress in lipotoxicity. Palmitate significantly induced cytotoxicity in dose- and time-dependent manners. Apoptosis was also significantly induced by palmitate as measured by caspase-3 activity and DAPI staining. Palmitate led to increased expressions of the spliced form of X-box-protein(Xbp)-1 mRNA and C/EBP homologous transcription factor(CHOP) protein, suggesting activation of the unfolded-protein response. PBA co-incubation significantly attenuated apoptosis induced by palmitate. The above data demonstrate that high levels of palmitate induce apoptosis via the mediation of ER stress in the liver cells and that chemical chaperones act to modulate ER stress and accompanying apoptosis.