Palmitoylation is a lipid modification that confers diverse functions to target proteins and is a contributing factor for many neuronal diseases. In this study, we demonstrate using [(3)H]palmitic acid labeling and acyl-biotinyl exchange that native and expressed dopamine transporters (DATs) are palmitoylated, and using the palmitoyl acyltransferase inhibitor 2-bromopalmitate (2BP), we identify several associated functions. Treatment of rat striatal synaptosomes with 2BP using lower doses or shorter times caused robust inhibition of transport V(max) that occurred with no losses of DAT protein or changes in DAT surface levels, indicating that acute loss of palmitoylation leads to reduction of transport kinetics. Treatment of synaptosomes or cells with 2BP using higher doses or longer times resulted in DAT protein losses and production of transporter fragments, implicating palmitoylation in regulation of transporter degradation. Site-directed mutagenesis indicated that palmitoylation of rat DAT occurs at Cys-580 at the intracellular end of transmembrane domain 12 and at one or more additional unidentified site(s). Cys-580 mutation also led to production of transporter degradation fragments and to increased phorbol ester-induced down-regulation, further supporting palmitoylation in opposing DAT turnover and in opposing protein kinase C-mediated regulation. These results identify S-palmitoylation as a major regulator of DAT properties that could significantly impact acute and long term dopamine transport capacity.