When variably fatty acylated N-terminal amino acid sequences were appended to a green fluorescent reporter protein (GFP), chimeric GFPs were localized to different membranes in a fatty acylation-dependent manner. To explore the mechanism of localization, the properties of acceptor membranes and their interaction with acylated chimeric GFPs were analyzed in COS-7 cells. Myristoylated GFPs containing a palmitoylated or polybasic region colocalized with cholesterol and ganglioside GM₁, but not with caveolin, at the plasma membrane and endosomes. A dipalmitoylated GFP chimera colocalized with cholesterol and GM₁ at the plasma membrane and with caveolin in the Golgi region. Acylated GFP chimeras did not cofractionate with low-density caveolin-rich lipid rafts prepared with Triton X-100 or detergent-free methods. All GFP chimeras, but not full-length p62^c-yes and caveolin, were readily solubilized from membranes with various detergents. These data suggest that, although N-terminal acylation can bring GFP to cholesterol and sphingolipid-enriched membranes, protein-protein interactions are required to localize a given protein to detergent-resistant membranes or caveolin-rich membranes. In addition to restricting acceptor membrane localization, N-terminal fatty acylation could represent an efficient means to enrich the concentration of signaling proteins in the vicinity of detergent-resistant membranes and facilitate protein-protein interactions mediating transfer to a detergent-resistant lipid raft core.