Fatty acid-binding proteins (FABPs) bind and internalize long-chain fatty acids, controlling lipid dynamics. Recent studies have proposed the involvement of FABPs, particularly FABP7, in lipid droplet (LD) formation in glioma, but the physiological significance of LDs is poorly understood. In this study, we sought to examine the role of FABP7 in primary mouse astrocytes, focusing on its protective effect against reactive oxygen species (ROS) stress. In FABP7 knockout (KO) astrocytes, ROS induction significantly decreased LD accumulation, elevated ROS toxicity, and impaired thioredoxin (TRX) but not peroxiredoxin 1 (PRX1) signalling compared to ROS induction in wild-type astrocytes. Consequently, activation of apoptosis signalling molecules, including p38 mitogen-activated protein kinase (MAPK) and stress-activated protein kinase/c-Jun N-terminal kinase (SAPK/JNK), and increased expression of cleaved caspase 3 were observed in FABP7 KO astrocytes under ROS stress. N-acetyl L-cysteine (NAC) application successfully rescued the ROS toxicity in FABP7 KO astrocytes. Furthermore, FABP7 overexpression in U87 human glioma cell line revealed higher LD accumulation and higher antioxidant defence enzyme (TRX, TRX reductase 1 [TRXRD1]) expression than mock transfection and protected against apoptosis signalling (p38 MAPK, SAPK/JNK and cleaved caspase 3) activation. Taken together, these data suggest that FABP7 protects astrocytes from ROS toxicity through LD formation, providing new insights linking FABP7, lipid homeostasis, and neuropsychiatric/neurodegenerative disorders, including Alzheimer’s disease and schizophrenia.