The metabolism of amyloid beta-protein precursor (APP) is regulated by various cytoplasmic and/or membrane-associated proteins, some of which are involved in the regulation of intracellular membrane trafficking. We found that a protein containing Asp-His-His-Cys (DHHC) domain, alcadein and APP interacting DHHC protein (AID)/DHHC-12, strongly inhibited APP metabolism, including amyloid beta-protein (Abeta) generation. In cells expressing AID/DHHC-12, APP was tethered in the Golgi, and APP-containing vesicles disappeared from the cytoplasm. Although DHHC domain-containing proteins are involved in protein palmitoylation, a AID/DHHC-12 mutant of which the enzyme activity was impaired by replacing the DHHC sequence with Ala-Ala-His-Ser (AAHS) made no detectable difference in the generation and trafficking of APP-containing vesicles in the cytoplasm or the metabolism of APP. Furthermore, the mutant AID/DHHC-12 significantly increased non-amyloidogenic alpha-cleavage of APP along with activation of a disintegrin and metalloproteinase 17, a major alpha-secretase, suggesting that protein palmitoylation involved in the regulation of alpha-secretase activity. AID/DHHC-12 can modify APP metabolism, including Abeta generation in multiple ways by regulating the generation and/or trafficking of APP-containing vesicles from the Golgi and their entry into the late secretary pathway in an enzymatic activity-independent manner, and the alpha-cleavage of APP in the enzymatic activity-dependent manner.