Hepatocytes show endoplasmic reticulum (ER) stress when exposed to lipotoxic stimuli such as hyperlipidemia. Recent work has revealed that AMP- activated protein kinase (AMPK) can mitigate ER stress. In this study we investigated the impact of AMPK on lipid-induced ER stress in hepatocytes and its underlying molecular mechanism. Treatment with 5-aminoimidazole-4-carboxamide ribonucleotide (AICAR), an AMPK agonist, or overexpression of a constitutively active AMPK significantly suppressed lipid-mediated ER stress, leading to marked protection against lipotoxic death. Incubation with AICAR and constitutively active AMPK overexpression induced the expression of an ER-associated chaperone, 150-kDa oxygen-regulated protein (ORP150), at both the mRNA and protein levels in hepatocytes. Forkhead box O1 (FOXO1) was identified as the critical transcription factor regulating ORP150 expression because silencing FOXO1 expression prevented the induction of ORP150 expression by AMPK. In contrast, overexpression of FOXO1-ADA promoted ORP150 expression in hepatocytes. FOXO1 bound directly to the ORP150 promoter, which was enhanced in the presence of AICAR. AMPK acts to activate FOXO1 by increasing its deacetylation and transcriptional activity via silent mating type information regulation 2 homolog 1 (SIRT1). Furthermore, AICAR infusion enhanced ORP150 expression, resulting in the marked amelioration of hepatic ER stress and apoptosis in C57BL/6J mice fed a high fat diet. Our results reveal a novel mechanism by which AMPK regulates ER homeostasis in hepatocytes and suggest that AMPK has a protective role against hypercholesterolemia-related liver damage.