Saturated fatty acids promote lipotoxic ER (endoplasmic reticulum) stress in pancreatic β-cells in association with Type 2 diabetes. To address the underlying mechanisms we employed MS in a comprehensive lipidomic screen of MIN6 β-cells treated for 48 h with palmitate. Both the overall mass and the degree of saturation of major neutral lipids and phospholipids were only modestly increased by palmitate. The mass of GlcCer (glucosylceramide) was augmented by 70% under these conditions, without any significant alteration in the amounts of either ceramide or sphingomyelin. However, flux into ceramide (measured by [3H]serine incorporation) was augmented by chronic palmitate, and inhibition of ceramide synthesis decreased both ER stress and apoptosis. ER-to-Golgi protein trafficking was also reduced by palmitate pre-treatment, but was overcome by overexpression of GlcCer synthase. This was accompanied by increased conversion of ceramide into GlcCer, and reduced ER stress and apoptosis, but no change in phospholipid desaturation. Sphingolipid alterations due to palmitate were not secondary to ER stress since they were neither reproduced by pharmacological ER stressors nor overcome using the chemical chaperone phenylbutyric acid. In conclusion, alterations in sphingolipid, rather than phospholipid, metabolism are more likely to be implicated in the defective protein trafficking and enhanced ER stress and apoptosis of lipotoxic β-cells.