In plants, fatty acids (FAs) and FA-derived complex lipids are major carbon and energy reserves in seeds. They are essential components of cellular membranes and cellular signal or hormone molecules. Although TRANSPARENT TESTA2 (TT2) is well studied for its function in regulating proanthocyanidin biosynthesis in the seed coat, little attention has been given to its role in affecting seed FA accumulation and tolerance to environmental stresses. We demonstrate that the tt2 mutation remarkably increased the seed FA content, decreased seed weight, and altered the FA composition. The increase in FA content in the tt2 seeds was due to the relative decrease of seed coat proportion as well as the more efficient FA synthesis in the tt2 embryo. Microarray analysis revealed that tt2 mutation up-regulated a group of genes critical to FA biosynthesis and embryonic development. The mutation also altered the gene expressions that respond to stress. The microarray analysis discovered that the increase in FA accumulation of the tt2 seeds were accompanied by the significant up-regulation of FUSCA3, a transcriptional factor for embryonic development and FATTY ACID ELONGASE1, which catalyzes the elongation of FA chains. Moreover, lower seed protein accumulation during seed maturation also contributed to the increased seed FA accumulation in tt2 mutants. This study advances the understanding of the TT2 gene in seed FA accumulation and abiotic stresses during seed germination and seedling establishment.