Plasma saturated free fatty acid (FFA)-induced endothelial dysfunction (ED) contributes to the pathogenesis of atherosclerosis and cardiovascular diseases. However, the mechanism underlying saturated FFA-induced ED remains unclear. This study demonstrated that palmitic acid (PA) induced ED by activating the NADPH oxidase (NOX)/ROS signaling pathway to activate protein phosphatase 4 (PP4) and protein phosphatase 2A (PP2A), thereby reducing endothelial nitric oxide synthase (eNOS) phosphorylation at Ser633 and Ser1177, respectively. Okadaic acid (OA) and fostriecin (FST), which are inhibitors of PP2A, inhibited the PA-induced decreases in eNOS phosphorylation at Ser633 and Ser1177. The antioxidants N-acetylcysteine (NAC) and apocynin (APO) or knockdown of gp91phox or p67phox (NOX subunits) restored PA-mediated downregulation of PP4R2 protein expression and eNOS Ser633 phosphorylation. Knockdown of the PP4 catalytic subunit (PP4c) specifically increased eNOS Ser633 phosphorylation, while silencing the PP2A catalytic subunit (PP2Ac) restored only eNOS Ser1177 phosphorylation. Furthermore, PA dramatically decreased the protein expression of the PP4 regulatory subunit R2 (PP4R2) but not the other regulatory subunits. PP4R2 overexpression increased eNOS Ser633 phosphorylation, nitric oxide (NO) production, cell migration and tube formation but did not change eNOS Ser1177 phosphorylation levels. Coimmunoprecipitation (Co-IP) suggested that PP4R2 and PP4c interacted with the PP4R3α and eNOS proteins. In summary, PA decreases PP4R2 protein expression through the Nox/ROS pathway to activate PP4, which contributes to ED by dephosphorylating eNOS at Ser633. The results of this study suggest that PP4 is a novel therapeutic target for ED and ED-associated vascular diseases.