Heterotrimeric G proteins sit at the cytoplasmic face of the membrane and transduce signals from cell surface receptors to intracellular effectors. G proteins, receptors and effectors have recently been found in membrane microdomains called lipid rafts that are enriched in cholesterol and sphingolipids. Lipid rafts can be isolated from membranes by their resistance to detergents and buoyancy on gradient centrifugation. Lipid rafts modulate a number of signal transduction pathways. We studied their role in Gs signaling by disrupting lipid rafts through depleting cells of cholesterol and sphingolipids. A5 cells treated with the cholesterol chelator, methyl-beta-cyclodextrin and mutant CHO cells unable to synthesize sphingolipids showed a loss and decrease, respectively, of Gs alpha in the detergent-resistant membrane fractions. Gs signaling as measured by cAMP accumulation in response to a receptor agonist was intact and slightly increased in cells depleted of cholesterol or sphingolipids compared to control cells. These results indicate that localization of Gs alpha to detergent-resistant membranes was not required for Gs signaling. Analysis of the role of lipid rafts on the kinetics of protein associations in the membrane suggests that compartmentation in lipid rafts may be more effective in inhibiting protein interactions and depending on the pathway, ultimately inhibit or promote signaling. RGS proteins (Regulators of G protein Signaling) are a recently discovered family of proteins that can turn-off G protein signaling by accelerating GTP hydrolysis and antagonizing G protein effectors. Several RGS proteins undergo palmitoylation and we found that the palmitoylation sites on RGS16 are critical for its ability to turn-off Gq and Gi signaling in cells but not for its in vitro GTPase activity. We investigated whether palmitoylation may act by targeting RGS proteins to G protein signaling components in the membrane by determining if RGS proteins reside in lipid rafts. After overexpression in COS cells, both RGS16 and RGS-GAIP were found in detergent-resistant membrane fractions. Multiple acylation sites appear to be critical for the targeting because RGS10, which has only one acylation site, and a palmitoylation-defective mutant of RGS16 were not located in the detergent-resistant membrane fractions. Palmitoylation may focus RGS proteins to G proteins in lipid rafts in order to facilitate their interaction that ultimately reduces signaling.