Free fatty acids (FFAs), elevated in metabolic syndrome and diabetes, play a crucial role in the development of atherosclerotic cardiovascular disease, and eicosapentaenoic acid (EPA) counteracts many aspects of FFA-induced vascular pathology. Although vascular calcification is invariably associated with atherosclerosis, the mechanisms involved are not completely elucidated. In this study, we tested the hypothesis that EPA prevents the osteoblastic differentiation and mineralization of vascular smooth muscle cells (VSMC) induced by palmitic acid (PA), the most abundant long-chain saturated fatty acid in plasma. PA increased and EPA abolished the expression of the genes for bone-related proteins, including bone morphogenetic protein (BMP)-2, Msx2 and osteopontin in human aortic smooth muscle cells (HASMC). Among the long-chain acyl-CoA synthetase (ACSL) subfamily, ACSL3 expression was predominant in HASMC, and PA robustly increased and EPA efficiently inhibited ACSL3 expression. Importantly, PA-induced osteoblastic differentiation was mediated, at least in part, by ACSL3 activation because acyl-CoA synthetase (ACS) inhibitor or siRNA targeted to ACSL3 completely prevented the PA induction of both BMP-2 and Msx2. Conversely, adenovirus-mediated ACSL3 overexpression enhanced PA-induced BMP-2 and Msx2 expression. In addition, EPA, ACSL3 siRNA and ACS inhibitor attenuated calcium deposition and caspase activation induced by PA. Notably, PA induced activation of NF-κB, and NF-κB inhibitor prevented PA-induction of osteoblastic gene expression and calcium deposition. Immunohistochemistry revealed the prominent expression of ACSL3 in VSMC and macrophages in human non-calcifying and calcifying atherosclerotic plaques from the carotid arteries. These results identify ACSL3 and NF-κB as mediators of PA-induced osteoblastic differentiation and calcium deposition in VSMC and suggest that EPA prevents vascular calcification by inhibiting such a new molecular pathway elicited by PA.