The interaction between fat deposition and inflammation during obesity contributes to the development of non-alcoholic fatty liver disease (NAFLD). The present study examined the effects of palmitoleate, a monounsaturated fatty acid (16:1n7), on liver metabolic and inflammatory responses, and investigated the mechanisms by which palmitoleate increases hepatocyte fatty acid synthase (FAS) expression. Male wild-type C57BL/6J mice were supplemented with palmitoleate and subjected to the assays to analyze hepatic steatosis and liver inflammatory response. Additionally, mouse primary hepatocytes were treated with palmitoleate and used to analyze fat deposition, the inflammatory response, and sterol regulatory element-binding protein 1c (SREBP1c) activation. Compared with controls, palmitoleate supplementation increased the circulating levels of palmitoleate and improved systemic insulin sensitivity. Locally, hepatic fat deposition and SREBP1c and FAS expression were significantly increased in palmitoleate-supplemented mice. These pro-lipogenic events were accompanied by improvement of liver insulin signaling. In addition, palmitoleate supplementation reduced the numbers of macrophages/Kupffer cells in livers of the treated mice. Consistently, supplementation of palmitoleate decreased the phosphorylation of nuclear factor kappa B (NF-kappa B, p65) and the expression of proinflammatory cytokines. These results were recapitulated in primary mouse hepatocytes. In terms of regulating FAS expression, treatment of palmitoleate increased the transcription activity of SREBP1c and enhanced the binding of SREBP1c to FAS promoter. Palmitoleate also decreased the phosphorylation of NF-kappa B p65 and the expression of proinflammatory cytokines in cultured macrophages. Together, these results suggest that palmitoleate acts through dissociating liver inflammatory response from hepatic steatosis to play a unique role in NAFLD.