T cell immunoglobulin and mucin domain-containing protein 3 (TIM-3) is an immune checkpoint that has critical roles in immune exhaustion. However, little is known about the mechanisms that regulate TIM-3 surface expression and turnover. Here, we report that human TIM-3 is palmitoylated by the palmitoyltransferase DHHC9 at residue cysteine 296 (Cys296). Palmitoylation stabilized TIM-3 by preventing binding to E3 ubiquitin ligase HRD1, thereby suppressing its polyubiquitination and degradation. DHHC9 knockdown attenuated chimeric antigen receptor T (CAR-T) cell exhaustion, and a peptidic inhibitor of TIM-3 palmitoylation accelerated TIM-3 degradation and enhanced antitumor immunity mediated by CAR-T cells and natural killer (NK) cells. In hepatocellular carcinoma, DHHC9 expression correlated with TIM-3 expression in CD8+ T cells and NK cells, and high DHHC9 expression was associated with shorter survival in patients with high TIM-3. These findings demonstrate that palmitoylation of TIM-3 catalyzed by DHHC9 promotes its stability, resulting in immune exhaustion and impaired antitumor immunity.