Protein palmitoylation, in which C16 fatty acid chains are attached to cysteine residues via a reversible thioester linkage, is one of the most common lipid modifications and plays important roles in regulating protein stability, subcellular localization, membrane trafficking, interactions with effector proteins, enzymatic activity, and a variety of other cellular processes. Moreover, the unique reversibility of palmitoylation allows proteins to be rapidly shuttled between biological membranes and cytoplasmic substrates in a process usually controlled by a member of the DHHC family of protein palmitoyl transferases (PATs). Notably, mutations in PATs are closely related to a variety of human diseases, such as cancer, neurological disorders, and immune deficiency conditions. In addition to PATs, intracellular palmitoylation dynamics are also regulated by the interplay between distinct posttranslational modifications, including ubiquitination and phosphorylation. Understanding the specific mechanisms of palmitoylation may reveal novel potential therapeutic targets for many human diseases.