X-linked adrenoleukodystrophy (X-ALD) is a peroxisomal disorder caused by mutations in the ABCD1 gene. Accumulation of very long chain fatty acids (VLCFA) that have been attributed to reduced peroxisomal VLCFA β-oxidation activity are the hallmark of the disease. Overexpression of ABCD2 gene, the closest homolog of ABCD1, has been shown to compensate for ABCD1, thus correcting the VLCFA derrangement. The accumulation of VLCFA leads to a neuroinflammatory disease process associated with demyelination of the cerebral white matter. The present study underlines the importance of caffeic acid phenethyl ester (CAPE) in inducing the expression of ABCD2 (ALDRP), and normalizing the peroxisomal β-oxidation as well as the levels of saturated and monounsaturated VLCFAs in cultured human skin fibroblasts of X-ALD patients. The expression of ELOVL1, the single elongase catalyzing the synthesis of both saturated VLCFA (C26:0) and mono-unsaturated VLCFA (C26:1), was also reduced by CAPE treatment. Importantly, CAPE upregulated Abcd2 expression and peroxisomal β-oxidation and lowered the VLCFA levels in Abcd1-deficient U87 astrocytes and B12 oligodendrocytes. In addition, using Abcd1/Abcd2-silenced mouse primary astrocytes we examined the effects of CAPE in VLCFA-induced inflammatory response. CAPE treatment decreased the inflammatory response as the expression of inducible nitric oxide synthase, inflammatory cytokine, and activation of NF-κB in Abcd1/Abcd2-silenced mouse primary astrocytes was reduced. The observations indicate that CAPE corrects both the metabolic disease of VLCFA as well as secondary inflammatory disease; therefore, it may be a potential drug candidate to be tested for X-ALD therapy in humans.