Fat supplementation of dairy cattle diets is a common practice to increase dietary energy and to thereby enhance milk and milk fat yields. However, the ability of dietary fat supplementation to modulate digestion, metabolism and performance can be influenced by the type of fatty acid (chain length and degree of saturation). Ceramide is a type of sphingolipid found in tissues and circulation that is formed by saturated fatty acids, including palmitic acid and the nonessential amino acid serine. Collectively, ceramide has emerged as a novel biomarker for insulin antagonism in dairy cattle and a target for the development of nutritional strategies aimed at modulating nutrient partitioning. Although studies have repeatedly demonstrated the ability of palm fat supplementation to induce ceramide synthesis in dairy cows, ongoing work aims to delineate the ceramide-related effects of very long-chain saturated fatty acids and PUFA that escape biohydrogenation, and the influence of emulsifiers that may enhance palmitic acid digestibility. Moreover, we should consider how palmitic acid-induced ceramide accrual is influenced by dietary energy density, co-supplementation with other fatty acids, level of milk production, stage of lactation, and parity. Unraveling these uncertainties has the potential to optimize fatty acid nutrition in dairy cattle.