In obesity and diabetes, an imbalance in fatty acid uptake and fatty acid utilization leads to excess accumulation of lipid in non-adipose tissues. This lipid overload is associated with cellular dysfunction and cell death, which contribute to organ failure, a phenomenon termed lipotoxicity. To elucidate the molecular mechanism of lipid-mediated cell death, we generated and characterized a mutant Chinese hamster ovary cell line that is resistant to palmitate-induced cell death. In this mutant, random insertion of a retroviral promoter trap has disrupted the gene for the non-coding RNA, growth arrested DNA-damage inducible gene 7 (gadd7). Here we report that gadd7 is induced by lipotoxic stress in a reactive oxygen species (ROS)-dependent fashion and is necessary for both lipid- and general oxidative stress-mediated cell death. Depletion of gadd7 by mutagenesis or short hairpin RNA knockdown significantly reduces lipid and non-lipid induced ROS. Furthermore, depletion of gadd7 delays and diminishes ROS-induced endoplasmic reticulum stress. Together these data are the first to implicate a non-coding RNA in a feed-forward loop with oxidative stress and its induction of the endoplasmic reticulum stress response.