S-Palmitoylation is an abundant lipid post-translational modification that is dynamically installed on and removed from target proteins to regulate their activity and cellular localization. A dearth of tools for studying the activities and regulation of protein S-depalmitoylases, thioesterase "erasers" of protein cysteine S-palmitoylation, has contributed to an incomplete understanding of the role of dynamic S-palmitoylation in regulating proteome lipidation. Recently, we developed "depalmitoylation probes" (DPPs), small molecule probes that become fluorescent upon S-depalmitoylase enzymatic activity. To be suitable for application in live cells, the first-generation DPPs relied on a shorter lipid substrate (C8 vs naturally occurring C16), which enhanced solubility and cell permeability. However, the use of an unnatural lipid substrate on the probes potentially limits the utility of the approach. Herein, we present a new member of the DPP family, DPP-5, which features an anionic carboxylate functional group that increases the probe water solubility. The enhanced water solubility of DPP-5 permits the use of a natural, palmitoylated substrate (C16), rather than a surrogate lipid. We show that DPP-5 is capable of monitoring endogenous S-depalmitoylases in live mammalian cells and that it can reveal changes in S-depalmitoylation levels due to lipid stress. DPP-5 should prove to be a useful new tool for probing the regulation of proteome lipidation through dynamic S-depalmitoylation.