Posttranslational lipid modifications are important for proper localization of many proteins in eukaryotic cells. However, the functional interrelationships between lipid modification processes in plants remain unclear. Here we demonstrate that the two heterotrimeric G-protein gamma-subunits from Arabidopsis (Arabidopsis thaliana), AGG1 and AGG2, are prenylated, and AGG2 is S-acylated. In wild type, enhanced yellow fluorescent protein-fused AGG1 and AGG2 are associated with plasma membranes, with AGG1 associated with internal membranes as well. Both can be prenylated by either protein geranylgeranyltransferase I (PGGT-I) or protein farnesyltransferase (PFT). Their membrane localization is intact in mutants lacking PFT activity and largely intact in mutants lacking PGGT-I activity but is disrupted in mutants lacking both PFT and PGGT-I activity. Unlike in mammals, Arabidopsis Ggammas do not rely on functional Galpha for membrane targeting. Mutation of the sixth to last cysteine, the putative S-acylation acceptor site, causes a dramatic change in AGG2 but not AGG1 localization pattern, suggesting S-acylation serves as an important additional signal for AGG2 to be targeted to the plasma membrane. Domain-swapping experiments suggest that a short charged sequence at the AGG2 C terminus contributes to AGG2's efficient membrane targeting compared to AGG1. Our data show the large degree to which PFT and PGGT-I can compensate for each other in plants and suggest that differential lipid modification plays an important regulatory role in plant protein localization.