To investigate the effects of saturated free fatty acid, palmitic acid (PA), on hepatocytes, we administered PA to rat hepatocytes. We demonstrated that PA inhibited the cell growth as a dose- and time-dependent manner in rat hepatocytes. PA-induced morphological changes including swelling, membrane dissolution and formation of debris, and apoptosis with appearance of sub-G1 fraction determined by cell cycle analysis after treatment for 4 days. The level of Bcl-2 was slightly decreased, in contrast, the level of Bax elevated markedly, which resulted in a significant decrease of Bcl-2/Bax ratio after PA treatment on HepG2 cells. These findings demonstrated that PA induces cell death on hepatocytes, perhaps via mitochondria-mediated apoptosis. Furthermore, the present study indicates that PA's cell toxicity may play important roles in the transition from steatosis to steatohepatitis in human especially with obesity.