Endoplasmic reticulum (ER) stress sensors use a related luminal domain to monitor the unfolded protein load and convey the signal to downstream effectors, signaling an unfolded protein response (UPR) that maintains compartment-specific protein folding homeostasis. Surprisingly, perturbation of cellular lipid composition also activates the UPR, with important consequences in obesity and diabetes. However, it is unclear if direct sensing of the lipid perturbation contributes to UPR activation. We found that mutant mammalian ER stress sensors, IRE1α and PERK, lacking their luminal unfolded protein stress-sensing domain, nonetheless retained responsiveness to increased lipid saturation. Lipid saturation-mediated activation in cells required an ER-spanning transmembrane domain and was positively regulated in vitro by acyl-chain saturation in reconstituted liposomes. These observations suggest that direct sensing of the lipid composition of the ER membrane contributes to the UPR.