Type 2 diabetes is characterized by dyslipidemia with elevated free fatty acids (FFAs). Loss of podocytes is a hallmark of diabetic nephropathy, and podocytes are susceptible to saturated FFAs, which induce endoplasmic reticulum (ER) stress and podocyte death. Genome-wide association studies indicate that expression of acetyl-CoA carboxylase (ACC) 2, a key enzyme of fatty acid oxidation (FAO), is associated with proteinuria in type 2 diabetes. Here, we show that stimulation of FAO by aminoimidazole-4-carboxamide-1β-d-ribofuranoside (AICAR) or by adiponectin, activators of the low-energy sensor AMP-activated protein kinase (AMPK), protects from palmitic acid-induced podocyte death. Conversely, inhibition of carnitine palmitoyltransferase (CPT-1), the rate-limiting enzyme of FAO and downstream target of AMPK, augments palmitic acid toxicity and impedes the protective AICAR effect. Etomoxir blocked the AICAR-induced FAO measured with tritium-labeled palmitic acid. The beneficial effect of AICAR was associated with a reduction of ER stress, and it was markedly reduced in ACC-1/-2 double-silenced podocytes. In conclusion, the stimulation of FAO by modulating the AMPK-ACC-CPT-1 pathway may be part of a protective mechanism against saturated FFAs that drive podocyte death. Further studies are needed to investigate the potentially novel therapeutic implications of these findings.