Abstract Background The immunomodulatory function of human mesenchymal stromal cells (MSCs) strongly depends on external factors; such as cytokines and other signalling molecules encountered in the disease microenvironment. An insufficiently inflammatory environment can fail to activate MSCs, and certain signals can impair their function. Obesity is on the rise worldwide, making it an additional factor to be considered prior to MSC therapy, as the microenvironment presents its own challenges. Elevated levels of serum free fatty acids, specifically palmitate, have the potential to affect MSC therapy. Palmitate-exposure has been shown to impair MSC immunomodulation of T cells in vitro. However, this is yet to be studied in the context of macrophages. Methods MSCs from three independent donors were exposed to 0.4mM of palmitate for 6–24 h. Gene expression, protein production and functional capacity were then assessed in response to palmitate. A ceramide synthesis inhibitor (Fumonisin B1) and a CC-chemokine ligand 2 (CCL2)-neutralising antibody were further used to assess the impact of these components on palmitate-associated immunomodulation. Results We demonstrated that palmitate-exposed MSCs have enhanced suppression of human monocyte-derived macrophage (MDM) production of tumour necrosis factor α (TNFα), in a CCL2-dependent manner. We further elucidated parts of the pathway, such as ceramide synthesis, through which palmitate promotes this enhanced immunomodulation of macrophages. Conclusion Palmitate-exposed MSCs show enhanced immunomodulation of human MDMs, through the ceramide/CCL2 axis in vitro.