Pancreatic β-cell proliferation is infrequent in adult humans and is not increased in type 2 diabetes despite obesity and insulin resistance, suggesting the existence of inhibitory factors. Free fatty acids (FFAs) may influence proliferation. In order to test whether FFAs restrict β-cell proliferation in vivo, mice were intravenously infused with saline, Liposyn II, glucose, or both, continuously for 4 days. Lipid infusion did not alter basal β-cell proliferation, but blocked glucose-stimulated proliferation, without inducing excess β-cell death. In vitro exposure to FFAs inhibited proliferation in both primary mouse β-cells and in rat insulinoma (INS-1) cells, indicating a direct effect on β-cells. Two of the fatty acids present in Liposyn II, linoleic acid and palmitic acid, both reduced proliferation. FFAs did not interfere with cyclin D2 induction or nuclear localization by glucose, but increased expression of inhibitor of cyclin dependent kinase 4 (INK4) family cell cycle inhibitors p16 and p18. Knockdown of either p16 or p18 rescued the antiproliferative effect of FFAs. These data provide evidence for a novel antiproliferative form of β-cell glucolipotoxicity: FFAs restrain glucose-stimulated β-cell proliferation in vivo and in vitro through cell cycle inhibitors p16 and p18. If FFAs reduce proliferation induced by obesity and insulin resistance, targeting this pathway may lead to new treatment approaches to prevent diabetes.