In metabolic syndrome, a systemic deregulation of the insulin pathway leads to a combined deregulation of insulin-regulated metabolism and cardiovascular functions. Free fatty acids (FFAs), which are increased in metabolic syndrome, inhibit insulin signaling and induce metabolic insulin resistance. This study was designed to examine FFAs' effects on vascular insulin signaling and endothelial nitric oxide (NO) synthase (eNOS) activation in endothelial cells. We showed that FFAs inhibited insulin signaling and eNOS activation through different mechanisms. While linoleic acid inhibited Akt-mediated eNOS phosphorylation, palmitic acid appeared to affect the upstream signaling. Upregulation of PTEN (phosphatase and tensin homolog deleted on chromosome 10) activity and transcription by palmitic acid mediated the inhibitory effects on insulin signaling. We further found that activated stress signaling p38, but not Jun NH(2)-terminal kinase, was involved in PTEN upregulation. The p38 target transcriptional factor activating transcription factor (ATF)-2 bound to the PTEN promoter, which was increased by palmitic acid treatment. In summary, both palmitic acid and linoleic acid exert inhibitory effect on insulin signaling and eNOS activation in endothelial cells. Palmitic acid inhibits insulin signaling by promoting PTEN activity and its transcription through p38 and its downstream transcription factor ATF-2. Our findings suggest that FFA-mediated inhibition of vascular insulin signaling and eNOS activation may contribute to cardiovascular diseases in metabolic syndrome.