Elevated circulating saturated fatty acids concentration is commonly associated with poorly controlled diabetes. The highly prevalent free fatty acid palmitate could induce apoptosis in various cell types, but little is known about its effects on human mesenchymal stem cells (MSCs). Here, we report that prolonged exposure to palmitate induces human bone marrow-derived MSC (hBM-MSC) and human umbilical cord-derived MSC apoptosis. We investigated the role of endoplasmic reticulum (ER) stress, which is known to promote cell apoptosis. Palmitate activated XBP1 splicing, elF2α (eukaryotic translation initiation factor 2α) phosphorylation, and CHOP, ATF4, BiP, and GRP94 transcription in hBM-MSCs. ERK1/2 and p38 MAPK phosphorylation were also induced by palmitate in hBM-MSCs. A selective p38 inhibitor inhibited palmitate activation of the ER stress, whereas the ERK1/2 inhibitors had no effect. The AMP-activated protein kinase activator aminoimidazole carboxamide ribonucleotide blocked palmitate-induced ER stress and apoptosis. These findings suggest that palmitate induces ER stress and ERK1/2 and p38 activation in hBM-MSCs, and AMP-activated protein kinase activator prevents the deleterious effects of palmitate by inhibiting ER stress and apoptosis.