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Lipotoxicity refers to the harmful effects of excess fatty acids on metabolic health, and it can vary depending on the type of fatty acids involved. Saturated and unsaturated fatty acids exhibit distinct effects, though the precise mechanisms behind these differences remain unclear. Here, we investigated the lipotoxicity of palmitic acid (PA), a saturated fatty acid, compared with oleic acid (OA), a monounsaturated fatty acid, in the hepatic cell line HuH7. Our results demonstrated that PA, unlike OA, induces lipotoxicity, endoplasmic reticulum (ER) stress, and autophagy inhibition. Compared with OA, PA treatment leads to less lipid droplet (LD) accumulation and a significant reduction in the mRNA and protein level of diacylglycerol acyltransferase 1 (DGAT1), a key enzyme of triacylglycerol synthesis. Using modulators of ER stress and autophagy, we established that DGAT1 downregulation by PA is closely linked to these cellular pathways. Notably, the ER stress inhibitor 4-phenylbutyrate can suppress PA-induced DGAT1 downregulation. Furthermore, knockdown of DGAT1 by siRNA or with A922500, a specific DGAT1 inhibitor, resulted in cell death, even with OA. Both PA and OA increased the oxygen consumption rate; however, the increase associated with PA was only partially coupled to ATP synthesis. Importantly, treatment with GW7647 a specific PPARα agonist mitigated the lipotoxic effects of PA, restoring PA-induced ER stress, autophagy block, and DGAT1 suppression. In conclusion, our study highlights the crucial role of DGAT1 in PA-induced lipotoxicity, broadening the knowledge of the mechanisms underlying hepatic lipotoxicity and providing the basis for potential therapeutic interventions.