Heterotrimeric G proteins sit at the cytoplasmic face of membranes and transduce signals. Palmitoylation occurs on most of the alpha subunits in the family of heterotrimeric G proteins. During an activation cycle, G alpha subunits communicate with G beta/gamma subunits, receptors, effectors and RGS proteins with palmitoylation modulating many of these protein interactions. In addition, palmitoylation can localize proteins to and within specific membrane sites. The localization of a splice variant of G alpha s, XL alpha s, to the Golgi complex is due, in part, to palmitoylation of cysteine residues adjacent to a Golgi targeting signal. Within membranes, palmitoylation can target proteins to microdomains, characterized by their resistance to detergents and enrichment in sphingolipids and cholesterol. G proteins are found in these microdomains, named rafts. Depletion of cellular cholesterol or sphingolipids disrupted the raft localization of G alpha s, but receptor-activated signaling through Gs remained intact suggesting that raft localization is not required for this function of Gs. Palmitoylation is a reversible modification with an increase in palmitate turnover on the G alpha subunit upon activation by a receptor. The enzymes responsible for reversible thioacylation have been elusive. A strong candidate for the thioesterase that removes palmitate is the 25-kDa protein, acyl-protein thioesterase 1 (APT1). Both APT1 and an isoform, APT2, (67% identical) are soluble proteins and expressed ubiquitously. The crystal structure of the human form of APT1 was solved to 1.8 angstrom resolution and showed that APT1 is a member of the alpha/beta hydrolase family, which includes other acylhydrolases such as the palmitoyl protein thioesterase. APT1 appears to be dimeric with the substrate-binding pocket and active site occluded by the dimer interface suggesting that dissociation occurs upon interaction with the substrate.