Endoplasmic reticulum (ER) stress is suggested to cause hepatic insulin resistance by increasing de novo lipogenesis (DNL) and directly interfering with insulin signaling through the activation of the c-Jun N-terminal kinase (JNK) and IkappaB kinase (IKK) pathway. The current study interrogated these two proposed mechanisms in a mouse model of hepatic insulin resistance induced by a high fructose (HFru) diet with the treatment of fenofibrate (FB) 100 mg/kg/day, a peroxisome proliferator-activated receptor alpha (PPARalpha) agonist known to reduce lipid accumulation while maintaining elevated DNL in the liver. FB administration completely corrected HFru-induced glucose intolerance, hepatic steatosis, and the impaired hepatic insulin signaling (pAkt and pGSK3beta). Of note, both the IRE1/XBP1 and PERK/eIF2alpha arms of unfolded protein response (UPR) signaling were activated. While retaining the elevated DNL (indicated by the upregulation of SREBP1c, ACC, FAS, and SCD1 and [3H]H2O incorporation into lipids), FB treatment markedly increased fatty acid oxidation (indicated by induction of ACOX1, p-ACC, beta-HAD activity, and [14C]palmitate oxidation) and eliminated the accumulation of diacylglycerols (DAGs), which is known to have an impact on insulin signaling. Despite the marked activation of UPR signaling, neither JNK nor IKK appeared to be activated. These findings suggest that lipid accumulation (mainly DAGs), rather than the activation of JNK or IKK, is pivotal for ER stress to cause hepatic insulin resistance. Therefore, by reducing the accumulation of deleterious lipids, activation of PPARalpha can ameliorate hepatic insulin resistance against increased ER stress.