Aging is associated with metabolic syndrome, tissue damage by cytotoxic lipids, and altered fatty acid handling. Fat tissue dysfunction may contribute to these processes. This could result, in part, from age-related changes in preadipocytes, since they give rise to new fat cells throughout life. To test this hypothesis, preadipocytes cultured from rats of different ages were exposed to oleic acid, the most abundant fatty acyl moiety in fat tissue and the diet. At fatty acid concentrations at which preadipocytes from young animals remained viable, cells from old animals accumulated lipid in multiple small lipid droplets and died, with increased apoptotic index, caspase activity, BAX, and p53. Rather than inducing apoptosis, oleic acid promoted adipogenesis in preadipocytes from young animals, with appearance of large lipid droplets. CCAAT/enhancer-binding protein-alpha (C/EBPalpha) and peroxisome proliferator-activated receptor-gamma (PPARgamma) increased to a greater extent in cells from young than old animals after oleate exposure. Oleic acid, but not glucose, oxidation was impaired in preadipocytes and fat cells from old animals. Expression of carnitine palmitoyltransferase (CPT)-1, which catalyzes the rate-limiting step in fatty acid beta-oxidation, was not reduced in preadipocytes from old animals. At lower fatty acid levels, constitutively active CPT I expression enhanced beta-oxidation. At higher levels, CPT I was not as effective in enhancing beta-oxidation in preadipocytes from old as young animals, suggesting that mitochondrial dysfunction may contribute. Consistent with this, medium-chain acyl-CoA dehydrogenase expression was reduced in preadipocytes from old animals. Thus preadipocyte fatty acid handling changes with aging, with increased susceptibly to lipotoxicity and impaired fatty acid-induced adipogenesis and beta-oxidation.