The phase equilibria knowledge of fatty acid and water mixtures play a crucial role in the design and operation of processes such as bio-diesel synthesis, sea water desalination and novel solvent design. Experimental data on the mutual solubility of fatty acid and water are scattered and limited. Atomistic molecular simulation approach can be a viable substitute for these predictions. In this work, a molecular simulation method is proposed that does not require molecular transfer between dense phases as in the Gibbs ensemble method and is based on determining phase equilibria by computing and equating the fugacity of water in the two phases. Assuming that the fugacity of water-rich phase is identical to that of pure water, an expression for the solubility of fatty acid in water is derived. In the current formalism, fugacity is determined by computing the residual chemical potential of water and fatty acids via thermodynamic integration. Mutual solubility between water and three different fatty acids are calculated over a range of temperatures and shown to yield good agreement with experimental data. Microscopic structural properties elucidating the role of the hydrogen bonding interactions between water and fatty acid and the aggregation of water molecules which gives rise to the observed macroscopic properties are also studied. (C) 2018 Elsevier B.V. All rights reserved.