The ability of cells to communicate with and respond to their external environment is critical for their continued existence. A universal feature of this communication is that the external signal must in some way penetrate the lipid bilayer surrounding the cell. In most cases of such signal acquisition, the signaling entity itself does not directly enter the cell but rather transmits its information to specific proteins present on the surface of the cell membrane. These proteins then communicate with additional proteins associated with the intracellular face of the membrane. Membrane localization and function of many of these proteins are dependent on their covalent modification by specific lipids, and it is the processes involved that form the focus of this article.