Chronic exposure to high levels of free fatty acids impairs beta-cell function (lipotoxicity). Then basal insulin secretion (BIS) is increased and glucose-stimulated insulin secretion (GSIS) is inhibited. Acetyl CoA carboxylase (ACC) acts as the sensor for insulin secretion in pancreatic beta-cells in response to glucose and other nutrients. Stevioside (SVS), a diterpene glycoside, has recently been shown to prevent glucotoxic effect by regulating ACC activity. The aim of this study was to investigate whether SVS can alleviate impaired beta-cell function by regulating ACC activity. We exposed isolated rat islets and the clonal beta-cell line, INS-1E, to palmitate concentrations of 1.0 or 0.6 mM, respectively, for a period of 24 h to 120 h. The results showed that lipotoxicity occurred in rat islets after 72 h exposure to 1.0 mM palmitate. The lipotoxicity was counteracted by 10-6 M SVS (n = 8, p < 0.001). Similar results were obtained in INS-1E cells. Neither SVS nor palmitate had any effect on the gene expression of ACC, insulin 2, and glucose transporter 2 in INS-1E cells. In contrast, palmitate significantly increased the gene expression of carnitine palmitoyl transporter 1 (n = 6, p = 0.003). However, the addition of SVS to palmitate did not counteract this effect (n = 6, p = 1.0). During lipotoxicity, SVS did not alter levels of ACC protein, phosphorylated- ACC, ACC activity or glucose uptake. Our results showed that SVS counteracts the impaired insulin secretion during lipotoxicity in rat islets as well as in INS-1E cells without affecting ACC activity.