Differential targeting of neuronal proteins to axons and dendrites is essential for directional information flow within the brain, however, little is known about this protein-sorting process. Here, we investigate polarized targeting of lipid-anchored peripheral membrane proteins, postsynaptic density-95 (PSD-95) and growthassociated protein-43 (GAP-43). Whereas the N-terminal palmitoylated motif of PSD-95 is necessary but not sufficient for sorting to dendrites, the palmitoylation motif of GAP-43 is sufficient for axonal targeting and can redirect a PSD-95 chimera to axons. Systematic mutagenesis of the GAP-43 and PSD-95 palmitoylation motifs indicates that the spacing of the palmitoylated cysteines and the presence of nearby basic amino acids determine polarized targeting by these two motifs. Similarly, the axonal protein paralemmin contains a C-terminal palmitoylated domain, which resembles that of GAP-43 and also mediates axonal targeting. These axonally targeted palmitoylation motifs also mediate targeting to detergent-insoluble glycolipid-enriched complexes in heterologous cells, suggesting a possible role for specialized lipid domains in axonal sorting of peripheral membrane proteins.Proper neuronal function requires selective protein targeting to specialized cellular and plasma membrane domains including the nerve terminal, node of Ranvier, axon hillock, and postsynaptic density. An early step in this targeting decision tree involves a polarized sorting of proteins to either dendritic (postsynaptic) or axonal (presynaptic) domains. However, the mechanisms by which neurons target specific proteins to dendrites versus axons are poorly understood. Better characterized is protein sorting to apical versus basolateral plasma membranes in polarized epithelial cells, which share certain features with axonal versus dendritic targeting in neurons (1, 2). That is, short cytosolic C-terminal protein-sorting motifs are one route for both dendritic and basolateral targeting (2), whereas specialized lipid rafts can mediate both axonal and apical sorting of certain transmembrane and glycosylphosphatidylinositol-anchored membrane proteins (3).The concept of specialized lipid rafts mediating polarized protein targeting emerged from observations that apical and basolateral cell membranes have different lipid compositions. Apical membranes are enriched in sphingolipids that aggregate with cholesterol to form packed raft-like domains within the fluid membrane bilayer. These rafts are insoluble in nonionic detergents and, hence, are termed detergent-insoluble glycolipid-enriched complexes (DIGs).1 These complexes form in the trans-Golgi network and incorporate certain transmembrane, GPI-anchored, and dually acylated proteins, which are then targeted to the apical plasma membrane (4, 5). The inhibition of DIG formation by sphingolipid or cholesterol depletion disrupts this apical/axonal sorting pathway (3, 6, 7). However, the polarized targeting of cytosolic proteins via DIGs has not been explored.Postsynaptic density-95 (PSD-9...