Introduction: Orlistat is the only FDA approved drug for long term management of obesity. It reduces the absorption of dietary fat by inhibiting lipase enzyme. Many cases of pancreatitis were clinically reported in people who used orlistat. Aim of The work:The aim of the present study is to shed a light on the possible deleterious effect of orlistat on the normal pancreatic tissue, and the molecular mechanisms beyond these changes. Materials & Methods: Thirty six female albino rats were divided into 4 groups: Control Group I (a) without treatment &I (b) received only1 ml fish oil. Group II received 30 mg/kg/day of orlistat dissolved in 1ml of fish oil orally for 8 weeks. Group III, received 40 mg/kg/day of orlistat .Group IV (a) & (b) withdrawal groups. Pancreas was dissected out and processed for histological and immunohistochemical study for CASPASE, TNF, INOS and INSULIN. Results: Orlistat caused variable degrees of pancreatic tissue degeneration, dilatation of pancreatic ducts with retained secretion, fatty degeneration and congestion. Inflammatory cells infiltration observed in both pancreatic acini and islets of Langerhan,s only with high dose (40mg/kg). Positive immunoreactivity for activated caspase 3 and iNOS being more evident in high dose and decrease in immunoreactivity for anti-insulin antibody. immunoreactivity for TNF-α had been shown in high dose. These effects disappear after low dose withdrawal only. Conclusion: Orlistat may induce inflammation, fatty degeneration and impaired insulin production in the pancreas. These effects are dose dependent, and it should be taken in consideration while prescribing orlistat as a treatment for obesity.