Background: People are paying more attention to the healthy and balanced diet with the improvement of their living standards. Milk fatty acids (FAs) have been reported that they were related to some atherosclerosis and coronary heart diseases in human. In our previous genome-wide association study (GWAS) on milk FAs in dairy cattle, 83 genome-wide significant single nucleotide polymorphisms (SNPs) were detected. Among them, two SNPs, ARS-BFGL-NGS-109493 and BTA-56389-no-rs associated with C18index (P = 0.0459), were located in the upstream of 1-acylglycerol-3-phosphate O-acyltransferase 3 (AGPAT3) gene. AGPAT3 is involved in glycerol-lipid, glycerol-phospholipid metabolism and phospholipase D signaling pathways. Hence, it was inferred as a candidate gene for milk FAs. The aim of this study was to further confirm the genetic effects of the AGPAT3 gene on milk FA traits in dairy cattle. Results: Through re-sequencing the complete coding region, and 3000 bp of 5' and 3' regulatory regions of the AGPAT3 gene, a total of 17 SNPs were identified, including four in 5' regulatory region, one in 5' untranslated region (UTR), three in introns, one in 3' UTR, and eight in 3' regulatory region. By the linkage disequilibrium (LD) analysis with Haploview4.1 software, two haplotype blocks were observed that were formed by four and 12 identified SNPs, respectively. Using SAS9.2, we performed single locus-based and haplotype-based association analysis on 24 milk FAs in 1065 Chinese Holstein cows, and discovered that all the SNPs and the haplotype blocks were significantly associated with C6:0, C8:0 and C10:0 (P < 0.0001-0.0384). Further, with Genomatix, we predicted that four SNPs in 5' regulatory region (g.146702957G > A, g.146704373A > G, g.146704618A > G and g.146704699G > A) changed the transcription factor binding sites (TFBSs) for transcription factors SMARCA3, REX1, VMYB, BRACH, NKX26, ZBED4, SP1, USF1, ARNT and FOXA1. Out of them, two SNPs were validated to impact transcriptional activity by performing luciferase assay that the alleles A of both SNPs, g.146704373A > G and g.146704618A > G, increased the transcriptional activities of AGPAT3 promoter compared with alleles G (P = 0.0004). Conclusions: In conclusion, our findings first demonstrated the significant genetic associations of the AGPAT3 gene with milk FAs in dairy cattle, and two potential causal mutations were detected.