The pheromone response in the yeast Saccharomyces cerevisiae is mediated by a heterotrimeric G protein. The Gβγ subunit (a complex of Ste4p and Ste18p) is associated with both internal and plasma membranes, and a portion is not stably associated with either membrane fraction. Like Ras, Ste18p contains a farnesyl-directing CaaX box motif (C-terminal residues 107 to 110) and a cysteine residue (Cys 106) that is a potential site for palmitoylation. Mutant Ste18p containing serine at position 106 (mutation ste18-C106S) migrated more rapidly than wild-type Ste18p during sodium dodecyl sulfate-polyacrylamide gel electrophoresis (SDS-PAGE). The electrophoretic mobility of wild-type Ste18p (but not the mutant Ste18p) was sensitive to hydroxylamine treatment, consistent with palmitoyl modification at Cys 106. Furthermore, immunoprecipitation of the Gβγ complex from cells cultured in the presence of [3 H] palmitic acid resulted in two radioactive species on nonreducing SDS-PAGE gels, with molecular weights corresponding to Gγ and Gβγ. Substitution of serine for either Cys 107 or Cys 106 resulted in the failure of Gβγ to associate with membranes. The Cys 107 substitution also resulted in reduced steady-state accumulation of Ste18p, suggesting that the stability of Ste18p requires modification at Cys 107. All of the mutant forms of Ste18p formed complexes with Ste4p, as assessed by coimmunoprecipitation. We conclude that tight membrane attachment of the wild-type Gβγ depends on palmitoylation at Cys 106 and prenylation at Cys 107 of Ste18p.