Paeonia ostii var. lishizhenii has been approved as a woody oil crop with the outstanding characteristic of abundant α-linolenic acid (C18:3, ALA) in its seed oil. The stearoyl-ACP desaturase gene (SAD) regulates the first key step from stearic acid (C18:0, SA) to oleic acid (C18:1, OA) in the ALA biosynthetic pathway, but its functional characterization in P. ostii var. lishizhenii is absent to date. In this study, a key PoSAD gene (1719 bp in length) was acquired from endosperm of P. ostii var. lishizhenii by transcriptome sequencing analysis and the RACE (rapid-amplification of cDNA ends) method. Bioinformatic analysis of the PoSAD protein showed high homology (ranging from 90.4% to 94.4%) and similar physical and chemical properties to SAD from other higher plants, indicating that it encodes a putative stearoyl-ACP desaturase. Analysis of cis-acting elements found several endosperm tissue-specific motifs; i.e., one Prolamin box, thirteen DOFCOREs and one RY repeat in its promoter. The results of the qRT-PCR experiments verified that PoSAD was most highly expressed in developing endosperm at 59 days after pollination (53.7 times that in shoots) compared with that in roots (1.4 times), stems (2.5 times), leaves (3.1 times), petals (13.1 times) and stamens (46.0 times). Meanwhile, the fatty acid contents in P. ostii var. lishizhenii endosperm at seven growth stages were compared with variation in PoSAD expression. Heterologous expression of PoSAD significantly decreased SA and increased OA content, which effectively reduced the ratios of SA to OA in Saccharomyces cerevisiae and Arabidopsis thaliana. However, contents and ratios of palmitic acid (C16:0) and palmitoleic acid (C16:1) were stable in transgenic yeast, and palmitoleic acid remained absent in transgenic A. thaliana seeds. These results illustrate that PoSAD plays an essential role in endosperm development of P. ostii var. lishizhenii, strictly in catalysis of SA desaturation and OA biosynthesis but without functioning in PA desaturation. The results contribute to our understanding of the characterization of PoSAD in OA biosynthesis in P. ostii var. lishizhenii.