Background: Chronic exposure of pancreatic β-cells to excess free fatty acids is thought to contribute to type 2 diabetes pathogenesis in obesity by impairing β-cell function and even leading to apoptosis. In β-cells, lipid droplet-associated protein perilipin 5 (PLIN5) has been shown to enhance insulin secretion by regulating intracellular lipid metabolism; the roles of PLIN5 in response to lipotoxicity remain poorly understood. Methods: INS-1 β-cells were transfected with PLIN5-overexpression adenovirus (Ad-PLIN5) and treated with palmitate. C57BL/6 J male mice were fed with high fat diet and tail intravenous injected with adeno-associated virus overexpressing PLIN5 (AAV-PLIN5) in β-cells. Results: Our data showed that palmitate and PPAR agonists including WY14643 (PPARα), GW501516 (PPARβ/δ), rosiglitazone (PPARγ) in vitro all induced PLIN5 expression in INS-1 cells. Under palmitate overload, although upregulating PLIN5 promoted lipid droplet storage, it alleviated lipotoxicity in INS-1 β-cells with improved cell viability, cell apoptosis and β-cell function. The protection role of PLIN5 in β-cell function observed in cell experiments were further verified in in vivo study indicated by mitigated glucose intolerance in high fat diet fed mice with β-cell-specific overexpression of PLIN5. Mechanistic experiments revealed that enhanced FAO induced by elevation of PLIN5, followed by decreased ER stress may be a major mechanism responsible for alleviation of lipotoxicity observed in the present study. Conclusions: Our finding substantiated the important role of PLIN5 in protection against lipotoxicity in β-cells. © 2019 The Author(s).