Membrane localization of Rho GTPases is essential for their biological functions and is dictated in part by a series of posttranslational modifications at a carboxyl-terminal CaaX motif: prenylation at cysteine, proteolysis of the aaX tripeptide, and carboxymethylation. The fidelity and variability of these CaaX processing steps are uncertain. The brain-specific splice variant of Cdc42 (bCdc42) terminates in a CCIF sequence. Here we show that brain Cdc42 undergoes two different types of posttranslational modification: classical CaaX processing or novel tandem prenylation and palmitoylation at the CCaX cysteines. In the dual lipidation pathway, bCdc42 was prenylated, but it bypassed proteolysis and carboxymethylation to undergo modification with palmitate at the second cysteine. The alternative postprenylation processing fates were conserved in the GTPases RalA and RalB and the phosphatase PRL-3, proteins terminating in a CCaX motif. The differentially modified forms of bCdc42 displayed functional differences. Prenylated and palmitoylated brain Cdc42 did not interact with RhoGDIα and was enriched in the plasma membrane relative to the classically processed form. The alternative processing of prenylated CCaX motif proteins by palmitoylation or by endoproteolysis and methylation expands the diversity of signaling GTPases and enables another level of regulation through reversible modification with palmitate.