Palmitoylation of p63, a type II membrane protein localized in the endoplasmic reticulum, is induced in a reversible manner by the drug brefeldin A. To study the requirements for palmitoylation, mutant forms of p63 were expressed in COS cells and analyzed by metabolic labeling with [3H]palmitate, immunoprecipitation, and SDS-polyacrylamide gel electrophoresis. By investigating deletion and point mutations, Cys100 in the 106-amino acid cytoplasmic tail of p63 has been identified as the site of acylation. Site-directed mutagenesis of residues 99-105 together with cytoplasmic tail truncation mutants showed that the amino acids surrounding Cys100 are not critical for palmitoylation of this residue. Analysis of a chimeric construct between p63 and the plasma membrane protein dipeptidylpeptidase IV further revealed that p63 palmitoylation is not dependent on its transmembrane domain. In contrast, the six-amino acid distance between the end of the predicted transmembrane domain and the palmitoylation site was found to be essential for proper acylation of p63.