Many organisms use fatty acid derivatives as biological regulators. In plants, for example, fatty acid-derived signals have established roles in the regulation of developmental and defense gene expression. Growing numbers of these compounds, mostly derived from fatty acid hydroperoxides, are being characterized. The model plant Arabidopsis thaliana is serving a vital role in the discovery of fatty acid-derived signal molecules and the genetic analysis of their synthesis and action. The Arabidopsis genome sequencing project, the availability of large numbers of mutants in fatty acid biosynthesis and signal transduction, as well as excellent pathosystems, make this plant a tremendously useful model for research in fatty acid signaling. This review summarizes recent progress in understanding fatty acid signaling in A. thaliana and highlights areas of research where progress is rapid. Particular attention is paid to the growing literature on the jasmonate family of regulators and their role in defense against insects and microbial pathogens.