Steatosis is characterized by an increase in free fatty acids, such as palmitic acid (PA), in hepatocytes and the accumulation of triglycerides in the liver. However, the role of intracellular autophagy in PA accumulation-induced hepatotoxicity is not clearly understood. Therefore, in this study, we investigated the effects of PA on autophagy in hepatocytes and its underlying mechanism of action. Treatment of HepG2 cells with PA induced a significant increase in intracellular p62 and LC3-II levels, suggesting inhibition of autophagy. Furthermore, PA inhibited autophagic flux in HepG2 cells, as monitored using GFP-RFP-LC3. Mechanistically, PA increased the phosphorylation of the Ser12 and Thr29 residues of LC3, which are autophagy inhibition markers, through protein kinase A (PKA) and protein kinase C (PKC) signaling. Finally, PKA and PKC inhibitors restored PA-induced autophagic flux inhibition, reduced intracellular lipid accumulation, and rescued the altered expression of lipogenic genes, such as SREBP-1c, in HepG2 cells. Thus, our study demonstrates the mechanism of autophagy inhibition by PA in hepatocytes and provides a potential therapeutic approach for preventing and treating hepatic steatosis.