Macrophage dysfunction in obesity and diabetes may predispose to the development of diabetic complications, such as infection and impaired healing after tissue damage. Saturated fatty acids, such as palmitate, are present at elevated concentrations in the plasma of patients with metabolic disease and may contribute to the pathogenesis of diabetes and its sequelae. To examine the effect of lipid excess on macrophage inflammatory function, we determined the influence of palmitate on LPS-mediated responses in peritoneal macrophages. Palmitate and LPS led to a profound synergistic cell death response in both primary and RAW 264.7 macrophages. The cell death had features of apoptosis and necrosis and was not dependent on endoplasmic reticulum stress, ceramide generation, or reactive oxygen species production. Instead, we uncovered a macrophage death pathway that required TLR4 signaling via TRIF but was independent of NF-κB, MAPKs, and IRF3. A significant decrease in macrophage lysosomal content was observed early in the death pathway, with evidence of lysosomal membrane damage occurring later in the death response. Overexpression of the transcription factor TFEB, which induces a lysosomal biogenic program, rescued the lysosomal phenotype and improved viability in palmitate- and LPS-treated cells. Our findings provide new evidence for cross-talk between lipid metabolism and the innate immune response that converges on the lysosome.