Phosphodiesterase 10A (PDE10A) is a striatum-enriched, dual-specific cyclic nucleotide phosphodiesterase that has gained considerable attention as a potential therapeutic target for psychiatric disorders such as schizophrenia. As such, a PDE10A-selective inhibitor compound, MP-10, has recently entered clinical testing. Since little is known about the cellular regulation of PDE10A, we sought to elucidate the mechanisms that govern its subcellular localization in striatal medium spiny neurons. Previous reports suggest that PDE10A is primarily membrane bound and is transported throughout medium spiny neuron axons and dendrites. Moreover, it has been shown in PC12 cells that the localization of the major splice form, PDE10A2, may be regulated by protein kinase A phosphorylation at threonine 16 (Thr-16). Using an antibody that specifically recognizes phosphorylated Thr-16 (pThr-16) of PDE10A2, we provide evidence that phosphorylation at Thr-16 is critical for the regulation of PDE10A subcellular localization in vivo. Furthermore, we demonstrate in primary mouse striatal neuron cultures that PDE10A membrane association and transport throughout dendritic processes requires palmitoylation of cysteine 11 (Cys-11) of PDE10A2, likely by the palmitoyl acyltransferases DHHC-7 and -19. Finally, we show that Thr-16 phosphorylation regulates PDE10A trafficking and localization by preventing palmitoylation of Cys-11 rather than by interfering with palmitate-lipid interactions. These data support a model whereby PDE10A trafficking and localization can be regulated in response to local fluctuations in cAMP levels. Given this, we propose that excessive striatal dopamine release, as occurs in schizophrenia, might exert differential effects on the regulation of PDE10A localization in the two striatal output pathways.