Here we demonstrate that multiple tetraspanin (transmembrane 4 superfamily) proteins are palmitoylated, in either the Golgi or a post-Golgi compartment. Using CD151 as a model tetraspanin, we identified and mutated intracellular N-terminal and C-terminal cysteine palmitoylation sites. Simultaneous mutations of C11, C15, C242, and C243 (each to serine) eliminated >90% of CD151 palmitoylation. Notably, palmitoylation had minimal influence on the density of tetraspanin protein complexes, did not promote tetraspanin localization into detergent-resistant microdomains, and was not required for CD151-alpha 3 beta 1 integrin association. However, the CD151 tetra mutant showed markedly diminished associations with other cell surface proteins, including other transmembrane 4 superfamily proteins (CD9, CD63). Thus, palmitoylation may be critical for assembly of the large network of cell surface tetraspanin-protein interactions, sometimes called the "tetraspanin web." Also, compared with wild-type CD151, the tetra mutant was much more diffusely distributed and showed markedly diminished stability during biosynthesis. Finally, expression of the tetra-CD151 mutant profoundly altered alpha 3 integrin-deficient kidney epithelial cells, such that they converted from a dispersed, elongated morphology to an epithelium-like cobblestone clustering. These results point to novel biochemical and biological functions for tetraspanin palmitoylation.