DHHC protein acyltransferases (PATs) catalyze the palmitoylation of eukaryotic proteins through an enzymatic mechanism that remains largely unexplored. In this study we have combined genetic and biochemical approaches to examine the molecular mechanism of palmitate transfer of the yeast Ras PAT, which is composed of Erf2 and Erf4. The palmitoylation reaction consists of two steps; they are autopalmitoylation of the enzyme to create a palmitoyl-Erf2 intermediate followed by the transfer of the palmitoyl moiety to the Ras substrate. Palmitoyl-CoA serves as the palmitate donor. To elucidate the kinetic properties of the Erf2⅐Erf4 PAT, we have developed a coupled enzyme assay that monitors the turnover of the palmitoyl-enzyme species indirectly by measuring the rate of CoASH release. Mutational analysis indicates that the DHHC motif constitutes the catalytic core of the enzyme required for autopalmitoylation and palmitoyl transfer to the Ras2 substrate. In the absence of Ras2, the palmitoyl-Erf2⅐Erf4 complex undergoes a cycle of hydrolysis and repalmitoylation, implying that in the presence of palmitoyl-CoA, the complex is autopalmitoylated and competent to transfer palmitate to a protein substrate.Post-translational modifications extend the functional and regulatory repertoire of proteins. In the case of protein lipidation, the addition of prenyl, palmitoyl, myristoyl, and cholesterol moieties affects subcellular localization and protein trafficking, solubility, and degradation (1, 2). Protein S-palmitoylation is the reversible thiol esterification of cysteine residues that is catalyzed by a family of DHHC motif-containing proteins called protein acyltransferases (PATs) 2 or simply palmitoyl transferases (3-5). Protein palmitoylation was first described over 30 years ago and has been implicated in key cellular processes including cell growth and proliferation, protein trafficking, protein turnover, and vesicle fusion (6, 7). The reversible nature of protein palmitoylation makes it well suited to play a regulatory role, including in heterotrimeric and small GTP-binding proteins, receptors, and ion channels (8, 9). PAT enzymes share a number of common features including four transmembrane domains and a canonical Asp-His-His-Cys sequence (DHHC motif) that has been hypothesized to be the catalytic center of the enzyme (5, 7, 10). Despite the central importance of protein palmitoylation in many physiological processes, the molecular mechanism of the palmitoylation reaction remains poorly understood.There are 7 DHHC PATs in yeast and 23 in mammals (7). Based on in silico topology (TMPRED) computer simulations, the peptide loop containing the signature DHHC residues is predicted to immediately precede a transmembrane domain placing the DHHC motif in juxtaposition to the membrane (11). In addition to the DHHC motif and the transmembrane domains, most but not all PATs contain a cysteine-rich domain (CRD) (7). The exceptions include Akr1, Akr2, Pfa5 (yeast), and DHHC22 (mammals), which lack one or more of the conserved cyste...