Fatty liver is a common metabolic disorder in dairy cows during the transition period. Perilipin 5 (PLIN5), a lipid droplet coat protein, plays important roles in the development of hepatic steatosis in mice and humans. Whether PLIN5 plays a role in the development of fatty liver in dairy cows is unknown. An in vivo study consisting of 10 healthy and 10 cows with fatty liver was performed to harvest liver tissue and blood samples. In addition, hepatocytes isolated from calves were infected with PLIN5 overexpression adenovirus for 48 h; treated with 0, 0.6, 1.2, or 2.4 mM nonesterified fatty acids (NEFA) for 24 h; or infected with PLIN5 silencing adenovirus for 48 h and then treated with 1.2 mM NEFA for 24 h. Serum concentrations of NEFA and β-hydroxybutyrate were greater in cows with fatty liver. Milk production and plasma glucose concentrations were lower in cows with fatty liver. The results revealed that PLIN5 is highly expressed in steatotic liver and localized to lipid droplets. The abundance of fatty acid and triacylglycerol (TAG) synthesis-related proteins including sterol regulatory element binding protein-1c, fatty acid synthase, acetyl-coA carboxylase 1, diacylglycerol acyltransferase 1, and diacylglycerol acyltransferase 2 was greater in the liver of cows with fatty liver. In contrast, the abundance of microsomal triglyceride transfer protein (MTP), apolipoprotein B100, and apolipoprotein E was lower in the liver of cows with fatty liver. Consequently, cows with fatty liver exhibited severe hepatic TAG accumulation and lower blood concentration of very low density lipoprotein apolipoprotein B (VLDL-ApoB). Overexpression of PLIN5 and exogenous NEFA in cultured hepatocytes increased the abundance of sterol regulatory element binding protein-1, fatty acid synthase, acetyl-coA carboxylase 1, diacylglycerol acyltransferase 1, and diacylglycerol acyltransferase 2 but decreased the abundance of microsomal triglyceride transfer protein, apolipoprotein B100, and apolipoprotein E, which promoted TAG synthesis and inhibited VLDL-ApoB assembly, inducing lipid accumulation. Importantly, knockdown of PLIN5 attenuated the upregulation of TAG synthesis and downregulation of VLDL-ApoB assembly induced by NEFA. Overall, these data suggest that NEFA activate PLIN5, leading to TAG accumulation and inhibition of VLDL assembly. As such, these mechanisms explain in part the development of hepatic steatosis in dairy cows.