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High levels of plasma free fatty acids (FFAs) lead to endothelial dysfunction (ED), which is involved in the pathogenesis of Metabolic Syndrome, diabetes as well as atherosclerosis. ER stress and Endothelial-to-mesenchymal transition (EndMT) are demonstrated mechanistically related to endothelial dysfunction. Mesenchymal stem cells (MSCs) have exhibited an extraordinary cytoprotective effect on cellular lipotoxicity and vasculopathy. However, the underlying mechanisms have not been clearly defined. In the present study, we investigated whether MSCs could ameliorate palmitic acid (PA) - induced endothelial lipotoxicity by reducing ER stress and EndMT. We observed that MSCs coculture substantially alleviated PA-induced lipotoxicity in human umbilical vein endothelial cells (HUVECs). MSCs were able to restore the cell viability, increase tubule formation and migration ability, and decrease inflammation response and lipid deposition. Furthermore, PA caused endothelial to mesenchymal transition in HUVECs, which was abrogated by MSCs possibly through inhibiting ER stress. In addition, PA stimulated MSCs to secrete more stanniocalcin 1 (STC1). Knocking down of STC1 in MSCs attenuated their effects on PA-induced lipotoxicity in HUVECs. In vivo, MSCs transplantation alleviated dyslipidemia and endothelial dysfunction in high fat diet-fed SD rats. MSCs treated rats showed reduced expressions of ER stress-related genes in aortas, as well as suppressed expressions of EndMT-related proteins in rat aortic endothelial cells (RAECs). Overall, our findings indicated that MSCs were able to attenuate endothelial lipotoxicity through inhibiting ER stress and EndMT, in which STC1 secreted from MSCs may play a critical role.