PKA anchoring proteins (AKAPs) optimize the efficiency of cAMP signaling by clustering interacting partners. Recently, AKAP79 has been reported to directly bind to adenylyl cyclase type 8 (AC8) and to regulate its responsiveness to store-operated Ca2+ entry (SOCE). Although AKAP79 is well targeted to the plasma membrane via phospholipid associations with three N-terminal polybasic regions, recent studies suggest that AKAP79 also has the potential to be palmitoylated, which may specifically allow it to target the lipid rafts where AC8 resides and is regulated by SOCE. In this study, we have addressed the role of palmitoylation of AKAP79 using a combination of pharmacological, mutagenesis, and cell biological approaches. We reveal that AKAP79 is palmitoylated via two cysteines in its N-terminal region. This palmitoylation plays a key role in targeting the AKAP to lipid rafts in HEK-293 cells. Mutation of the two critical cysteines results in exclusion of AKAP79 from lipid rafts and alterations in its membrane diffusion behavior. This is accompanied by a loss of the ability of AKAP79 to regulate SOCE-dependent AC8 activity in intact cells and decreased PKA-dependent phosphorylation of raft proteins, including AC8. We conclude that palmitoylation plays a key role in the targeting and action of AKAP79. This novel property of AKAP79 adds an unexpected regulatory and targeting option for AKAPs, which may be exploited in the cellular context.