Periodontal disease is more prevalent and severe in patients with diabetes than that in nondiabetic patients. In addition to diabetes, a large number of studies have demonstrated an association between obesity and chronic periodontal disease. However, the underlying mechanisms have not been well understood. Since plasma free fatty acids (FAs) are elevated in obese patients and saturated FAs such as palmitic acid (PA) have been shown to increase host inflammatory response, we sought to find out how PA interacts with lipopolysaccharide (LPS), an important pathological factor involved in periodontal disease, to enhance inflammation. We found that while low concentration of LPS (1 ng/ml) stimulated interleukin (IL)-6 expression in RAW264.7 macrophages, PA further augmented it by 4 folds. Besides IL-6, PA amplified the stimulatory effect of LPS on a large number of toll-like receptor (TLR)4-mediated expression of pro-inflammatory signaling molecules such as interleukin-1 receptor-associated kinase-like 2 and pro-inflammatory molecules including monocyte chemotactic protein-1 and colony stimulating factor. We also observed that PA augmented TLR4, but not TLR2 signal, and the augmentation was mediated by nuclear factor kappa B (NFB) pathways. To further elucidate the regulatory mechanism whereby PA amplifies LPS signal, our studies showed that PA and LPS synergistically increased hydrolysis of sphingomyelin by stimulating acid sphingomyelinase (ASMase) activity, which contributed to a marked increase in ceramide production and IL-6 upregulation. Taken together, this study has demonstrated that PA markedly augments TLR4-mediated proinflammatory signaling triggered by low concentration of LPS in macrophages and ASMase plays a key role in the augmentation.