Elevated circulating levels of saturated free fatty acids (sFFAs; e.g. palmitate) are known to provoke inflammatory responses and cause insulin resistance in peripheral tissue. By contrast, mono- or poly-unsaturated FFAs are protective against sFFAs. An excess of sFFAs in the brain circulation may also trigger neuroinflammation and insulin resistance, however the underlying signaling changes have not been clarified in neuronal cells. In the present study, we examined the effects of palmitate on mitochondrial function and viability as well as on intracellular insulin and nuclear factor-κB (NF-κB) signaling pathways in Neuro-2a and primary rat cortical neurons. We next tested whether oleate preconditioning has a protective effect against palmitate-induced toxicity. Palmitate induced both mitochondrial dysfunction and insulin resistance while promoting the phosphorylation of mitogen-activated protein kinases and nuclear translocation of NF-κB p65. Oleate pre-exposure and then removal was sufficient to completely block subsequent palmitate-induced intracellular signaling and metabolic derangements. Oleate also prevented ceramide-induced insulin resistance. Moreover, oleate stimulated ATP while decreasing mitochondrial superoxide productions. The latter were associated with increased levels of peroxisome proliferator-activated receptor-γ coactivator-1α (PGC-1α). Inhibition of protein kinase A (PKA) attenuated the protective effect of oleate against palmitate, implicating PKA in the mechanism of oleate action. Oleate increased triglyceride and blocked palmitate-induced diacylglycerol accumulations. Oleate preconditioning was superior to docosahexaenoic acid (DHA) or linoleate in the protection of neuronal cells against palmitate- or ceramide-induced cytotoxicity. We conclude that oleate has beneficial properties against sFFA and ceramide models of insulin resistance-associated damage to neuronal cells.