Abstract Aims/hypothesis During the onset of type 2 diabetes, excessive dietary intake of saturated NEFA and fructose lead to impaired insulin production and secretion by insulin-producing pancreatic beta cells. The majority of data on the deleterious effects of lipids on functional beta cell mass were obtained either in vivo in rodent models or in vitro using rodent islets and beta cell lines. Translating data from rodent to human beta cells remains challenging. Here, we used the human beta cell line EndoC-βH1 and analysed its sensitivity to a lipotoxic and glucolipotoxic (high palmitate with or without high glucose) insult, as a way to model human beta cells in a type 2 diabetes environment. Methods EndoC-βH1 cells were exposed to palmitate after knockdown of genes related to saturated NEFA metabolism. We analysed whether and how palmitate induces apoptosis, stress and inflammation and modulates beta cell identity. Results EndoC-βH1 cells were insensitive to the deleterious effects of saturated NEFA (palmitate and stearate) unless stearoyl CoA desaturase (SCD) was silenced. SCD was abundantly expressed in EndoC-βH1 cells, as well as in human islets and human induced pluripotent stem cell-derived beta cells. SCD silencing induced markers of inflammation and endoplasmic reticulum stress and also IAPP mRNA. Treatment with the SCD products oleate or palmitoleate reversed inflammation and endoplasmic reticulum stress. Upon SCD knockdown, palmitate induced expression of dedifferentiation markers such as SOX9, MYC and HES1. Interestingly, SCD knockdown by itself disrupted beta cell identity with a decrease in mature beta cell markers INS, MAFA and SLC30A8 and decreased insulin content and glucose-stimulated insulin secretion. Conclusions/interpretation The present study delineates an important role for SCD in the protection against lipotoxicity and in the maintenance of human beta cell identity. Data availability Microarray data and all experimental details that support the findings of this study have been deposited in in the GEO database with the GSE130208 accession code.