Free-fatty acids (FFAs) are well-characterized factor for causing production of inflammatory factors and insulin resistance in adipocytes. Using cultured adipocytes, we demonstrate that FFAs can activate endoplasmic reticulum (ER) stress pathway by examination of ER stress sensor activation and marker gene expression. Chemical chaperone tauroursodeoxycholic acid (TUDCA) can reduce FFA-induced adipocyte inflammation and improve insulin signaling whereas overexpression of spliced X-box protein 1 (XBP-1s) only attenuates FFA-induced inflammation. PKR-like eukaryotic initiation factor 2α kinase (PERK) is one of the three major ER stress sensor proteins and deficiency of PERK alleviates FFA-induced inflammation and insulin resistance. The key downstream target of FFA-induced ER stress is IκB kinase β (IKKβ), a master kinase for regulating expression of inflammatory genes. Deficiency of PERK attenuates FFA-induced activation of IKKβ and deficiency of IKKβ alleviates FFA-induced inflammation and insulin resistance. Consistently, overexpression of IKKβ in 3T3-L1 CAR adipocytes causes inflammation and insulin resistance. In addition, IKKβ overexpression has profound effect on adipocyte lipid metabolism, including inhibition of lipogenesis and promotion of lipolysis. Furthermore, increased endogenous IKKβ expression and activation is also observed in isolated primary adipocytes from mice injected with lipids or fed on high-fat diet (HFD) acutely. These results indicate that ER stress pathway is a key mediator for FFA-induced inflammation and insulin resistance in adipocytes with PERK and IKKβ as the critical signaling components.