The objective of the experiment was to determine the effects of supplemental SFA sources, lysophospholipids (LPL), and their interaction on production and nutrient digestibility in lactating dairy cows. The experiment was conducted with 48 cows in a randomized complete block design. Cows were blocked (12 blocks total) by parity and days in milk and randomly assigned to 4 dietary treatments in each block (2 × 2 factorial arrangement), i.e., 2 sources of fat supplements, C16:0 (PA)- or C18:0 (SA)-enriched fat, and with or without LPL. The experiment was conducted for 6 wk to measure daily dry matter intake, milk yield, and weekly milk composition. During the last week of the experiment, spot fecal and urine samples were collected to determine total-tract nutrient digestibility. Milk samples in the last week were also collected to analyze the milk fatty acid (FA) profile. All data were analyzed using the MIXED procedure of SAS, where block was used as a random effect and FA, LPL, and the interaction of FA by LPL were used as fixed effects. Week and interactions of week by FA or LPL were included for production measures. Different sources of SFA did not affect dry matter intake and milk yield. However, the PA treatment increased (39.7 vs. 36.8 kg) energy-corrected milk compared with SA due to increased milk fat yield. No effect of LPL on production measures was observed. Total-tract digestibilities of dry matter, organic matter, crude protein, and total FA were not different between the PA and SA groups, but PA increased (41.4% vs. 38.8%) neutral detergent fiber digestibility compared with SA. Supplementation of LPL increased (64.7% vs. 60.5%) total FA digestibility, especially 18-carbon FA (74.1% vs. 68.2%). An interaction of SFA by LPL was found for 16-carbon FA digestibility. The PA diet increased the concentration of 16-carbon FA in milk fat and SA increased the concentration of preformed FA (≥18 carbons). Supplementation of LPL decreased the concentration of trans-10 C18:1. No difference in N utilization and excretion among treatments was observed. In conclusion, the PA diet was more effective in improving milk fat yield of lactating cows compared with SA. Supplementation of LPL increased digestibility of total FA, especially 18-carbon FA but did not affect production.