CCR5 is a CC chemokine receptor expressed on memory lymphocytes, macrophages, and dendritic cells and also constitutes the main coreceptor for macrophage-tropic (or R5) strains of human immunodeficiency viruses. In the present study, we investigated whether CCR5 was palmitoylated in its carboxyl-terminal domain by generating alanine substitution mutants for the three cysteine residues present in this region, individually or in combination. We found that wild-type CCR5 was palmitoylated, but a mutant lacking all three Cys residues was not. Through the use of green fluorescent fusion proteins and immunofluorescence studies, we found that the absence of receptor palmitoylation resulted in sequestration of CCR5 in intracellular biosynthetic compartments. By using the fluorescence recovery after photobleaching technique, we showed that the non-palmitoylated mutant had impaired diffusion properties within the endoplasmic reticulum. We next studied the ability of the mutants to bind and signal in response to chemokines. Chemokines binding and activation of G(i)-mediated signaling pathways, such as calcium mobilization and inhibition of adenylate cyclase, were not affected. However, the duration of the functional response, as measured by a microphysiometer, and the ability to increase [(35)S]guanosine 5'-3-O-(thio)triphosphate binding to membranes were severely affected for the non-palmitoylated mutant. The ability of RANTES (regulated on activation normal T cell expressed and secreted) and aminooxypentane-RANTES to promote CCR5 endocytosis was not altered by cysteine replacements. Finally, we found that the absence of receptor palmitoylation reduced the human immunodeficiency viruses coreceptor function of CCR5, but this effect was secondary to the reduction in surface expression. In conclusion, we found that palmitoylated cysteines play an important role in the intracellular trafficking of CCR5 and are likely necessary for efficient coupling of the receptor to part of its repertoire of signaling cascades.