Accumulating evidence suggests that glucolipotoxicity, arising from the combined actions of elevated glucose and free fatty acid levels, acts as a key pathogenic component in type II diabetes, contributing to β-cell dysfunction and death. Endoplasmic reticulum (ER) stress is among the molecular pathways and regulators involved in these negative effects, and ceramide accumulation due to glucolipotoxicity can be associated with the induction of ER stress. Increased levels of ceramide in ER may be due to enhanced ceramide biosynthesis and/or decreased ceramide utilization. Here, we studied the effect of glucolipotoxic conditions on ceramide traffic in INS-1 cells in order to gain insights into the molecular mechanism(s) of glucolipotoxicity. We showed that glucolipotoxicity inhibited ceramide utilization for complex sphingolipid biosynthesis, thereby reducing the flow of ceramide from the ER to Golgi. Glucolipotoxicity impaired both vesicular- and CERT-mediated ceramide transport through (1) the decreasing of phospho-Akt levels which in turn possibly inhibits vesicular traffic, and (2) the reducing of the amount of active CERT mainly due to a lower protein levels and increased protein phosphorylation to prevent its localization to the Golgi. In conclusion, our findings provide evidence that glucolipotoxicity-induced ceramide overload in the ER, arising from a defect in ceramide trafficking may be a mechanism that contributes to dysfunction and/or death of β-cells exposed to glucolipotoxicity.