Several studies have previously highlighted the importance of cholesterol-rich lipid raft membrane microdomains in the processing of amyloid precursor protein (APP) by β- and γ-secretases to release Alzheimer's disease-associated amyloid peptides (Aβ). Biochemical fractionation and antibody co-patching methods indicate that a significant fraction of the β-secretase BACE-1 is targeted to lipid rafts. However, the molecular determinants responsible for BACE-1 targeting to lipid rafts are still unknown. Radiolabeled palmitic acid labeling, biochemical lipid rafts-isolation, Western blot, antibody co-patching, immunocytochemistry Here, we show that BACE-1 undergoes post-translational S-palmitoylation at four cysteine residues within the transmembrane and cytosolic domains. Substitution of these 4 cysteines to alanines was sufficient to abolish BACE-1 S-palmitoylation and targeting to lipid raft domains. However, wild type and palmitoylation-defective BACE-1 appear to have similar subcellular distribution in stably transfected cell lines. We also identified a subset of DHHC-containing palmitoyl-transferases that were able to mediate BACE-1 S-palmitoylation. Our studies indicate that S-palmitoylation is required for BACE-1 targeting to lipid rafts. As S-palmitoylation is a reversible post-translational modification, DHHC-containing palmitoyl-transferase activities might mediate dynamic modulation of BACE-1 association to lipid rafts.