In mammals, pigments are made by melanocytes within a specialized organelle, the melanosome. Mature, pigment-laden melanosomes are then transferred to keratinocytes to drive the visible pigmentation of the animal's hair and skin. The dilute suppressor (dsu) locus encodes an extragenic suppressor of the pigmentation defect exhibited by mice lacking myosin Va (i.e. dilute mice). We recently showed that melanoregulin, the product of the dsu locus, functions as a negative regulator of a shedding mechanism that drives the intercellular transfer of melanosomes from the melanocyte to the keratinocyte. Here we address melanoregulin's localization within the melanocyte, as well as the molecular basis for its localization. First, we confirm and extend recently published results using exogenous, GFP-tagged melanoregulin by showing that endogenous melanoregulin also targets extensively to melanosomes. Second, using site-directed mutagenesis, metabolic labeling with H-3-palmitate, and an inhibitor of palmitoylation in vivo, we show that the targeting of melanoregulin to the limiting membranes of melanosomes in melanocytes and lysosomes in CV1 cells depends critically on the palmitoylation of one or more of six closely-spaced cysteine residues located near melanoregulin's N-terminus. Finally, using Fluorescence Recovery after Photobleaching (FRAP), we show that melanoregulin-GFP exhibits little if any tendency to cycle in and out of the melanosome membrane. We conclude that multiple palmitoylation serves to stably anchor melanoregulin in the melanosome membrane. Published by Elsevier Inc.