Covalent attachment of lipids is a near-universal mechanism through which eukaryotic cells direct and, in some cases, control membrane localization of G proteins. Studies conducted over the past year have substantially advanced our understanding of both the molecular mechanisms and the functional consequences of these modifications. Of particular note are the processes of palmitoylation of the alpha-subunits of heterotrimeric G proteins, and prenylation of members of the Ras superfamily of monomeric G proteins, where recent findings point to unexpected roles for lipid modifications in signaling through these proteins.