Obesity-related neurodegenerative diseases are associated with elevated saturated fatty acids (SFAs) in the brain. An increase in SFAs, especially palmitic acid (PA), triggers neuron cell apoptosis, causing cognitive function to deteriorate. In the present study, we focused on the specific mechanism by which PA triggers SH-SY5Y neuron cell apoptosis. We found that PA induces significant neuron cell cycle arrest in the G2/M phase in SH-SY5Y cells. Our data further showed that G2/M arrest is involved in elevation of endoplasmic reticular (ER) stress according to an increase in p-eukaryotic translation inhibition factor 2α, an ER stress marker. Chronic exposure to PA also accelerates beta-amyloid accumulation, a pathological characteristic of Alzheimer's disease. Interestingly, SFA-induced ER stress, G2/M arrest and cell apoptosis were reversed by treatment with 2-bromopalmitate, a protein palmitoylation inhibitor. These findings suggest that protein palmitoylation plays a crucial role in SFA-induced neuron cell cycle G2/M arrest, ER stress and apoptosis; this provides a novel strategy for preventing SFA-induced neuron cell dysfunction.