Palmitic acid (PA) and other saturated fatty acids are known to stimulate pro-inflammatory responses in human immune cells via Toll-like receptor 4 (TLR4). However, the molecular mechanism responsible for fatty acid stimulation of TLR4 remains unknown. Here, we demonstrate that PA functions as a ligand for TLR4 on human monocyte derived dendritic cells (MoDCs). Hydrophobicity protein modeling indicated PA can associate with the hydrophobic binding pocket of TLR4 adaptor protein MD-2. Isothermal titration calorimetry quantified heat absorption that occurred during PA titration into TLR4/MD2, indicating that PA binds to TLR4/MD2. Treatment of human MoDCs with PA resulted in endocytosis of TLR4, further supporting the function of PA as a TLR4 agonist. In addition, PA stimulated DC maturation and activation based on the upregulation of DC costimulatory factors CD86 and CD83. Further experiments showed that PA induced TLR4 dependent secretion of the pro-inflammatory cytokine IL-1β. Lastly, our experimental data show that PA stimulation of NF-κB canonical pathway activation is regulated by TLR4 signaling and that reactive oxygen species may be important in upregulating this pro-inflammatory response. Our experiments demonstrate for the first time that PA activation of TLR4 occurs in response to direct molecular interactions between PA and MD-2. In summary, our findings suggest a likely molecular mechanism for PA induction of pro-inflammatory immune responses in human dendritic cells expressing TLR4.