microRNAs, a class of small non-coding RNAs, are believed to regulate several biological pathways and processess and are implicated in several diseases. They mostly regulate the levels of their target genes at the post transcriptional stage by primarily binding to the 3'UTR. Elevated hepatic levels of miR-107 are a consistent feature associated with several obese and diabetic models. Here, we show that miR-107 post-transcriptionally regulates fatty acid synthase (FASN) by binding to its 3'UTR and reduces its protein levels and the 3’UTR luciferase reporter activity, which is blunted by the miR-107 inhibitor and mutation in the miR-107 binding site on the 3'UTR. Knock-down of endogenous miR-107 levels increased FASN levels in a dose-dependent manner. Overexpression of miR-107 led to significant accumulation of malonyl CoA, accompanied by ER stress induction. All these events were prevented in the presence of the miR-107 inhibitor. While overexpression of FASN could attenuate miR-107 mediated ER stress markers' induction; the ER stress inhibitor, 4-phenyl-butyric acid did not rescue miR-107 induced FASN inhibition. This was followed by increased triglyceride formation and lipid accumulation in the presence of miR-107. These indicate that miR-107 inhibits FASN levels by binding to its 3'UTR and this interaction promotes ER stress induction and malonyl CoA and lipid accumulation in HepG2 cells and primary hepatocytes. Our results suggest that increased levels of miR-107 are critical in promoting lipid accumulation in hepatocytes and this might form the basis of diverse etiologies encountered in a fatty liver.