A high-fat diet has been shown to significantly increase the risk of the development of Alzheimer's disease (AD), a neurodegenerative disease histochemically characterized by the accumulation of amyloid beta (Abeta) protein in senile plaques and hyperphosphorylated tau in neurofibrillary tangles. Previously, we have shown that saturated free fatty acids (FFAs), palmitic and stearic acids, caused increased amyloidogenesis and tau hyperphosphorylaion in primary rat cortical neurons. These FFA-induced effects observed in neurons were found to be mediated by astroglial FFA metabolism. Therefore, in the present study we investigated the basic mechanism relating astroglial FFA metabolism and AD-like changes observed in neurons. We found that palmitic acid significantly increased de-novo synthesis of ceramide in astroglia, which in turn was involved in inducing both increased production of the Abeta protein and hyperphosphorylation of the tau protein. Increased amyloidogenesis and hyperphoshorylation of tau lead to formation of the two most important pathophysiological characteristics associated with AD, Abeta or senile plaques and neurofibrillary tangles, respectively. In addition to these pathophysiological changes, AD is also characterized by certain metabolic changes; abnormal cerebral glucose metabolism is one of the distinct characteristics of AD. In this context, we found that palmitic acid significantly decreased the levels of astroglial glucose transporter (GLUT1) and down-regulated glucose uptake and lactate release by astroglia. Our present data establish an underlying mechanism by which saturated fatty acids induce AD-associated pathophysiological as well as metabolic changes, placing 'astroglial fatty acid metabolism' at the center of the pathogenic cascade in AD.