Twelve years have passed since the initial report on the modification of viral proteins with covalently linked fatty acids appeared (Schmidt et al., 1979). With gratitude the first author and his students look back on a number of fruitful and happy years in Professor Rott's department, during which we contributed to furthering insight into the fatty acylation of proteins. Following the initial discovery this area has expanded tremendously, and as reflected by a great number of review articles (e.g. Schmidt 1982a; Low 1987, Schulz et al., 1988; Towler et al., 1988; Grand 1989; Schmidt 1989; Schmidt and Schlesinger, 1991) research on "hydrophobic modifications of proteins" has occupied virologists, cell-biologists and biochemists alike. Rather than duplicating the circulating reviews at this stage we take this occasion to report new data on the enzymatic nature of fatty acylation. We believe that the knowledge of the acylating enzymes will provide the cornerstone for full understanding of this hydrophobic modification of proteins.